The Bush administration moved Wednesday to freeze the assets of a Middle East group that the government says serves as a "charitable front" to funnel money to a Palestinian terrorist group.

The Treasury Department ordered U.S. banks to block any accounts or financial assets found in this country that belong to the al-Ihsan Society (search), also known as the Elehssan Society (search). The action also prohibits Americans from donating to the group.

The government accused the group of being a "charitable front" for the Palestinian Islamic Jihad (search), which has carried out deadly attacks against Israelis and others.

"Elehssan masquerades as a charity, while actually helping to finance Palestinian Islamic Jihad's acts of terror against the Israel people and other innocents," said Stuart Levey, the department's under secretary for the office of terrorism and financial intelligence.

The department offered no estimate of how much money al-Ihsan channeled to Palestinian Islamic Jihad. It said that the group worked with Islamic Jihad to distribute money to the families of Jihad members held prisoner by Israel and deceased members. It said the group maintained lists of families associated with Islamic Jihad -- including the families of suicide bombers -- who were to receive compensation.

The government said al-Ihsan used Internet Web sites to solicit funds. It also said Palestinian Islamic Jihad used al-Ihsan to recruit members.

The department said its action covers the entire al-Ihsan organization, including its headquarters in Gaza, and all of its branches, including those in West Bank towns of Bethlehem, Hebron, Jenin, Ramallah and Tulkaram, as well as in Lebanon.

Separately, Levey, in testimony Wednesday before a House hearing on terrorist financing, welcomed steps that Saudi Arabia has taken to combat the problem but said more needs to be done.

The Saudis have yet to set up an oversight commission to regulate its charitable sector and prevent collaboration with terrorists, he said. "While that would represent a satisfactory short-term solution, if actually implemented, it is important that the announced commission take shape," Levey said.