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Another Palestinian Minister Sneaks Millions to Gaza in Suitcase

The Palestinians' Hamas-led government, nearly bankrupted by bruising international sanctions, has resorted to bringing in cash in suitcases to help keep itself afloat.

It's a dramatic — and desperate — cloak-and-dagger gambit. 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, globe-trotting Palestinian Cabinet ministers returned to the impoverished Gaza Strip at the border crossing with Egypt with millions of dollars stuffed in their luggage.

CountryWatch: Israel

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

In all cases, 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 $23 million declared by Hamas barely puts a dent in the hundreds of millions of dollars that Western powers and Israel have cut off to pressure Hamas to disarm militants and end its call for Israel's destruction.

The dry up 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, $2 million here and $20 million there can stretch only so far.

The money 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.

Seeking a way out of the cash crunch, 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 to lift the international sanctions.

Hamas hasn't buckled under, though, 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 neighboring Egypt. Zahar came back after visiting Indonesia, Malaysia, Brunei, China, Pakistan, Iran, Syria and Egypt. The money raised there came from private donations and Islamic charities, Hamad 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 might not deliver.

Arab governments have shortchanged the Palestinians on past pledges, and have offered little help offsetting the Western and Israeli boycott. These countries 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 big question is whether Western powers will let Hamas continue ferrying in money through the Rafah border crossing with Egypt.

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, a close associate of Abbas', said the monitoring mission sent a letter warning that the entry of 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 straight 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 Regev.

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