GAZA, (Reuters) – Israel allowed trucks carrying 100 million shekels ($25 million) into the Hamas-run Gaza Strip on Thursday to ease a shortage of banknotes in the Israeli-blockaded territory, Palestinian bank officials said.
Armoured trucks brought the money, destined for Gaza banks, from the Israeli-occupied West Bank, where Palestinian President Mahmoud Abbas’s government, led by Prime Minister Salam Fayyad, is based.
The sum fell short of the 250 million shekels ($63 million) that Fayyad said was needed to pay salaries to his government’s workforce in the Gaza Strip, where a severe cash shortage prompted banks to shut their doors last week.
Israeli Defence Minister Ehud Barak approved the transfer of the 100 million shekels following a request from Bank of Israel Governor Stanley Fischer.
The Israeli central bank said in a statement it did not want to be responsible for the possible collapse of the Palestinian banking system.
Barak had also come under pressure from the International Monetary Fund, the World Bank and Middle East envoy Tony Blair to transfer the money.
Western officials said the cash was needed to protect Abbas’s standing in the Gaza Strip, which Hamas Islamists seized in June 2007 after routing secular Fatah forces loyal to the Western-backed president.
The transfer was denounced by some Israeli cabinet ministers, who said the money should be withheld to increase pressure on Hamas to free a captive Israeli soldier.
In contrast to Abbas, Hamas has largely been able to pay salaries on time to its workforce in the coastal territory, Palestinian and Western officials say.
In addition to banknotes, Israel has tightened restrictions on the flow of goods to the Gaza Strip to try to weaken Hamas.
It closed its border crossings with Gaza on Nov. 4, cutting food and fuel supplies, when its troops raided the enclave to destroy what the army described as a tunnel built by militants to kidnap Israeli soldiers.
Gaza militants responded to the raid with rocket and mortar fire and Israel killed about a dozen militants in the subsequent fighting. A ceasefire, which largely held until the raid, is due to expire next week and may not be extended.
An official from Israeli Prime Minister Ehud Olmert’s office said a continued escalation in violence next year could lead to an Israeli troop raid into Gaza. “I think, in 2009, we could see an escalation (of Israeli military activity) in the south,” Olmert spokesman Mark Regev told reporters in London.
“If the rockets keep coming as they are coming, then we have to look at what options are available to us, and we have several … Israel would prefer to return to calm. The current situation with the rockets is unsustainable. If it continues, then we have to consider our options. If they stop shooting then we can de-escalate immediately,” Regev added.