Israel transferred $15 million in tax revenues to the cash-strapped Palestinian Authority on Wednesday in a move meant to ease conditions in the poverty stricken West Bank and Gaza Strip.
Palestinian Finance Minister Salam Fayad said he had received the money and denied Israeli claims that it had set conditions on the transfer of the funds.
"The Palestinian Authority refuses any conditions to get any of our frozen money from Israel. This money is the Palestinian right, which is not subject to any concessions or conditions, or any kind of external control," he said in a statement.
Raanan Gissin, an adviser to Prime Minister Ariel Sharon, said Fayad had initially refused to accept the money because of Israel's insistence that it be used only for humanitarian purposes.
"We don't want the money to go to any of the Palestinian institutions where the money either goes into their pockets ... or to finance organizations that carry out terrorist attacks against us," Gissin said.
Israel has withheld an estimated $600 million in tax money over the past 22 months of fighting, debilitating the Palestinian economy and plunging many Palestinians into poverty. Human rights groups say many Palestinian children are suffering from malnutrition and that unemployment is rampant due to Israel's ongoing siege.
Under international pressure, Israel recently agreed to release some of the funds. Israel says its blockades aren't meant to harm ordinary Palestinians, but to prevent suicide bombers from reaching Israeli population centers.
On Tuesday, a Palestinian suicide bomber blew himself up in a popular fast-food restaurant in central Jerusalem, wounding seven Israelis. Earlier in the day, two masked Palestinian gunmen shot dead two Jewish settler brothers who went to sell fuel in a Palestinian village in the West Bank.
Gissin said the Israeli security establishment has received more than 60 alerts in the past 10 days of pending suicide bombings. He said 12 bombers have been intercepted in the past week.
On Wednesday, Israeli soldiers demolished a Palestinian legislative committee building in the West Bank town of Jenin after the army said it found 660 pounds of homemade explosives inside. Palestinians said about 10 shops were destroyed in the three-story complex that also included several apartments.
Also in Jenin, Israeli troops arrested an Islamic Jihad fugitive, Allah Saadi, 20, from the Jenin refugee camp, sources in the militant group said. The soldiers surrounded his hide-out and arrested him without incident, they said.
In the Gaza Strip, meanwhile, troops entered a Palestinian refugee camp near the Egyptian border, raiding and searching homes, Palestinian security sources said. About 10 homes were destroyed, two acres of agricultural land razed and an irrigation system destroyed, the sources said.
Israel Radio, meanwhile, reported that a taxi driver had been arrested for allegedly transporting the two suicide bombers who blew themselves up in Tel Aviv on July 17. The blast killed an Israeli and three foreign workers. Police referred calls to the Shin Bet security service, which didn't immediately comment.
Later Wednesday, civil rights activist Rev. Jesse Jackson was to meet with the Hamas spiritual leader, Sheik Ahmed Yassin, in Gaza.
Hamas has claimed responsibility for dozens of suicide bombings since the start of the uprising and has vowed to avenge Israel's killing last week of its military leader, Salah Shehadeh, in a missile strike that killed 14 other Palestinians, many of them children.
Despite the tit-for-tat violence, Gissin said Defense Minister Binyamin Ben-Eliezer was planning to meet newly appointed Palestinian Interior Minister Abdel Rezak Yehiyeh. Palestinians said serious preparations were underway for security talks but no date had been set for a meeting.