updated 6/14/2006 9:06:40 AM ET 2006-06-14T13:06:40

Palestinian Foreign Minister Mahmoud Zahar, who has been seeking to raise money for the financially strapped government, returned to the Gaza Strip on Wednesday with a suitcase full of cash, Palestinians officials said.

An official said Zahar was believed to be carrying up to $20 million. The official spoke on condition of anonymity because he wasn’t authorized to speak to the media. An official statement was expected later Wednesday.

The official said Zahar had declared the money at the border, which is controlled by President Mahmoud Abbas’ presidential guard and monitored by European observers. It was not immediately clear whether Zahar would be permitted to keep the money.

Last month, a Hamas official was caught as he tried to smuggle about $800,000 into Gaza. The money was seized, but later returned to the government. Normal travelers must declare all sums over $2,000 and explain their origin.

Abbas has been in a power dispute with the Hamas-led government, and his presidential guard must make the final decision about what to do with the money.

Government is broke
A cutoff in Western aid has left the Hamas-led Palestinian government broke. Tens of thousands of civil servants haven’t received salaries in more than three months. The money carried by Zahar would cover only a small portion of the government’s piling debts.

Israel and Western donors have demanded that Hamas renounce violence and recognize Israel’s right to exist as a condition for restoring the aid. Hamas, which is sworn to Israel’s destruction, has rejected the calls and instead turned to Arab and Muslim countries for help.

The source of Zahar’s money wasn’t immediately known. During his recent trip, Zahar traveled to Indonesia, Malaysia, Brunei, China, Pakistan, Iran and Egypt.

Hamas has said it has raised over $60 million, but previously has been unable to transfer the money to the Palestinian areas because banks are afraid of running afoul of U.S. anti-terrorism laws.

The U.S., European Union and Israel consider Hamas a terrorist group.

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