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Section:

Quick Cash May Not Be Enough for Hamas

By Amy Teibel
Associated Press
Thursday, June 15, 2006

http://us.f527.mail.yahoo.com/ym/ShowFolder?
YY=68773&inc=25&order=down&sort=date&pos=0&view=a&head=b&box=Inbox

The Palestinians' Hamas-led government, nearly bankrupted by
international sanctions, has resorted to bringing in cash in
suitcases to help keep itself afloat. But given the government's
crushing debt, a scolding from European border monitors and Israeli
concerns the money could be used for violence, the tactic could
fizzle out fast.

Twice this week, Palestinian Cabinet ministers returned to the
impoverished Gaza Strip at the border crossing with Egypt with
millions of dollars stuffed in their luggage.

Information Minister Youssef Rizka said he brought in $2 million
Thursday. Foreign Minister Mahmoud Zahar trumped him a day earlier,
delivering $20 million. Lower-level officials have delivered about $1
million in recent weeks.

The money was turned over to the government, most likely for long-
overdue salaries to civil servants, officials said.

"It's not our fate to surrender and to give up to this siege," said
government spokesman Ghazi Hamad.

For all the bravura, the money barely puts a dent in the hundreds of
millions of dollars Western powers and Israel have cut off to
pressure Hamas to disarm militants and end its call for Israel's
destruction.

The dryup of international funding has rendered the cash-starved
Palestinian government unable, since February, to pay employees who
support one-third of the Palestinian population.

The Cabinet's cash couriers are providing a much-needed fix. But with
government expenses totaling $160 million a month, the money can
stretch only so far.

The cash coming in from the crossing could "ease the situation for a
month or two, but it is not the best way" to run the government,
conceded Ahmed Youssef, a political adviser to Prime Minister Ismail
Haniyeh of Hamas.

Youssef would not say how much money Hamas hoped to bring in through
the passage.

President Mahmoud Abbas, a moderate from the rival Fatah movement,
has asked Hamas to endorse a proposal that implicitly recognizes
Israel. Abbas believes a common political front would help lift the
international sanctions.

Hamas hasn't buckled under, despite growing hardship that has
provoked sometimes violent protests. Instead, it has turned to the
Muslim world for help.

Rizka returned to Gaza on Thursday from a trip to Qatar, Saudi Arabia
and Egypt. Zahar came back after visiting Indonesia, Malaysia,
Brunei, China, Pakistan, Iran, Syria and Egypt. In both cases, the
money came from private donations and Islamic charities, Hamas
officials said.

The big bucks, though, would have to come from Arab governments,
which have promised $660 million in aid this year. If history is any
judge, they may not deliver.

Arab governments have shortchanged the Palestinians on past pledges,
and have offered little help offsetting the Western and Israeli
boycott. They are under U.S. pressure to turn off the taps to Hamas,
and in many cases, are reluctant to fund a group that is part of a
global Islamic movement they view as a threat.

Hamas says Arab and Muslim states have deposited more than $60
million into an Arab League account in Egypt. But international banks
have refused to allow the group to transfer money electronically to
Palestinian territories, fearing sanctions from the U.S., which
labels Hamas a terror group.

Another question is whether Western powers will let Hamas continue
ferrying in money through the Rafah border crossing.

After Israel withdrew from Gaza last year, the U.S. brokered a deal
giving Palestinians control over Rafah, under the observation of
European Union monitors. Using the border to circumvent Western
sanctions might not sit well with Washington or European capitals.

Palestinian lawmaker Saeb Erekat said the monitoring mission sent a
letter warning that bringing money through Rafah violated the border
agreement.

"I hope that this will not be the way to facilitate the closure of
the Rafah terminal," Erekat said.

Julio De La Guardia, a spokesman for the monitors, confirmed a letter
had been sent to the Palestinians but did not divulge the contents.

A Western diplomat said it was too soon to say whether the cross-
border cash flow violated anti-terrorism laws. He spoke on condition
of anonymity because the matter is still being debated.

The officials who brought in the money said it would go to the
Palestinian treasury. But as VIPs, ministers do not have to submit
their bags for inspection, raising the possibility that other funds
are being smuggled in to finance violent activities against Israel or
clashes with Abbas' Fatah group.

"The amount of money being brought in by cash is not enough to run
the PA (Palestinian Authority) government. But unfortunately, it's
enough to keep a terrorist infrastructure very much alive," said
Israel Foreign Ministry spokesman Mark Reg.

"We have raised our concerns with the relevant parties," he said, but
wouldn't disclose their reactions.

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