$817K Confiscated From Hamas Official

Palestinian security forces loyal to President Mahmoud Abbas confiscated $817,000 from a high-profile Hamas official who tried to smuggle it in from Egypt on Friday, a European Union spokesman said, in a possible sign of how desperate the cash-starved Hamas government is for money.

Earlier Friday, a gun battle erupted for the first time between police loyal to Palestinian President Mahmoud Abbas and a new security force the Hamas government deployed in defiance of Abbas' ban, edging the rivals closer to a wider spasm of violence.

The Hamas official, spokesman Sami Abu Zuhri, wasn't immediately available to comment on the incident at the Gaza-Egypt passage at Rafah.

Palestinian officials said Abu Zuhri was on his way back from Qatar, whose government has pledged to give the Palestinian Authority $50 million, but has been stymied by Western economic sanctions on the militantly anti-Israel Hamas government.

Julio De La Guardia, a spokesman for a European Union contingent that monitors the crossing, said travelers crossing through Rafah must declare all sums over $2,000 and explain its origin.

"He (Abu Zuhri) did not declare that money, he tried to smuggle it," De La Guardia said.

The Hamas government has been broke since the West and Israel dried up hundreds of millions of dollars in aid because of Hamas' refusal to disarm and recognize Israel.

The cutoffs have rendered Hamas unable to pay two months of back wages to government employees who provide for one-third of people in the already impoverished West Bank and Gaza Strip.

Dozens of Hamas gunmen blocked the crossing after the money was confiscated. Abu Zuhri was escorted out of the terminal by Ghazi Hamad, a Hamas government spokesman, and a political adviser to Prime Minister Ismail Haniyeh of Hamas.

Meanwhile, two policemen and a Hamas gunman were wounded in the gunfight near the Palestinian parliament building and the police headquarters, symbols of the power struggle between Hamas and Abbas' Fatah party.

Abbas, elected to replace longtime Palestinian leader Yasser Arafat in January 2005, has been assuming new powers in an effort to strengthen his international and domestic standing since Hamas' surprise election victory over the long-ruling Fatah in a January vote.

But in tandem, infighting between the two sides has been spreading, raising the specter of an all-out civil war Abbas had hoped to avoid by refusing to disarm Hamas before the elections, despite Israeli and U.S. pressure.

The gunfight was apparently sparked by unknown gunmen who opened fire from a moving car on the Fatah-dominated police headquarters, said Khaled Abu Hilal, spokesman for the Hamas-controlled Interior Ministry. The police, loyal to Abbas, apparently thought nearby Hamas forces were responsible and fired at them.

A police spokesman, who spoke on condition of anonymity because he wasn't authorized to speak to the press, accused the Hamas-led force of igniting the gunfight.

The sides worked throughout the night to calm the situation, bringing in Egyptian diplomats to help mediate, Abu Hilal said.

Haniyeh earlier brushed off Abbas' order to remove the militia from the streets. Abbas quickly backed down, fearing civil war, but his restraint risked making him look weak and unable to keep the militants in check.

Abbas, who is abroad, plans to deal with the new force as a legal matter, and rules out an armed confrontation, aide Tayeb Abdel Rahim said.

As president, Abbas wields significant authority and has been trying to reduce Hamas' power. Abbas is trying to persuade the world to deal with him directly, and to funnel vitally needed foreign aid through his office.

The sanctions, and Israel's withholding of some $50 million in monthly tax revenues, have crippled the Hamas-led Palestinian Authority, which has been unable to pay salaries to its 165,000 employees during the past two months.

Israeli Prime Minister Ehud Olmert denied the sanctions had caused a humanitarian crisis in the Gaza Strip, saying the reports were based on Palestinian propaganda. However, he said Israel was prepared to directly send medicines and other supplies to Palestinian hospitals.

"We wouldn't allow one baby to suffer one night because of a lack of dialysis," Olmert was quoted as saying in an interview published Friday in The New York Times. "We will pay, if necessary,out of our own pockets."

Olmert restated his position that Abbas must disarm militants, including Hamas, before Israel would sit with him at the negotiating table.

Even before the January election put Hamas in power, Abbas avoided confronting Hamas and other militant groups, hoping to tame them through negotiations. Now he clearly fears an all-out civil war, though activists on all sides insist their weapons should be directed against Israel, not each other.

The swelling Hamas-Fatah friction, including deadly drive-by ambushes against two Hamas gunmen in Gaza earlier in the week, came alongside new efforts to explore a possible revival of Mideast peace contacts.

Abbas was to hold talks Sunday with Israeli Foreign Minister Tzipi Livni, the first high-level meeting since Hamas came to power, Palestinian official Saeb Erekat said.
IBRAHIM BARZAK