Image: Ismail Haniyeh
Petros Karadjias  /  AP
Palestinian Authority Prime Minister Ismail Haniyeh speaks to a group of government employees. Thousands of desperate civil servants received about $300 in emergency payments Monday.
updated 6/19/2006 9:23:23 PM ET 2006-06-20T01:23:23

Thousands of Palestinian workers left postal banks carrying crisp $100 bills Monday, their first payday since March, as the Hamas-led government dipped into suitcases full of cash its officials carried into Gaza to circumvent a Western aid cutoff.

Only postal banks dared handle the money because commercial banks fear anti-terrorism sanctions, and Palestinian officials admitted they had no way to transport the money to the West Bank or convert it to a local currency for electronic transfers.

The United States, Israel and European Union list Hamas as a terrorist group because it rejects the existence of Israel and has sent dozens of suicide bombers into the Jewish state, killing hundreds.

The West demands that Hamas recognize Israel, renounce violence and accept previous peace accords, but Hamas refuses. As a result, the West has cut off much-needed aid to the Palestinian government.

Last week, Foreign Minister Mahmoud Zahar, a Hamas leader, hauled $20 million in cash across the Egyptian border into Gaza, and another official followed with $2 million. Hamas officials said the money came from private donations and Islamic charities.

The money distributed to workers Monday came from those suitcases.

Suitcase funds not enough
Though Hamas officials insist they will continue carrying cash across the border, it is not nearly enough to solve their government’s financial crisis.

The Palestinian Authority is the largest employer in the West Bank and Gaza with 165,000 workers, and their salaries add up to about $130 million a month. The last three paydays have been missed, and another is due in less than two weeks.

Hundreds of civil servants lined up at Gaza post offices Monday for payouts. Living without paychecks for so long, government workers have sold valuables and run up large debts to scrape by.

“I’m worried because I don’t know where to begin. The grocery wants money. The bakery wants money, and I also need to pay my rent,” said Samir Hassanya, 42, a health worker.

The Finance Ministry said 91,000 workers earning $333-$555 a month received $300 Monday. Earlier this month, the government paid 40,000 workers who earn below $333 a month.

‘Some problems with the banks’
Finance Minister Omar Abdel Razek acknowledged he was forced to make direct payment from the hand-carried cash while avoiding commercial banks.

“We are paying through the post office because we have some problems with the banks because of the direct or indirect threats by the U.S. and Israel,” he said.

Concerned about the deteriorating situation, Mideast peacemakers — including the United States and EU — approved a plan over the weekend to transfer $125 million in humanitarian aid to the Palestinian people, bypassing the government.

The EU’s top foreign policy official, Benita Ferrero-Waldner, was in the region Monday to discuss both the aid plan and Israeli Prime Minister Ehud Olmert’s proposal for a unilateral West Bank withdrawal.

Ferrero-Waldner called Olmert’s plan a “very courageous step” but also said a “durable peace can only be achieved through dialogue and negotiations.”

Three demands
Ferrero-Waldner later met with Palestinian President Mahmoud Abbas, a rival of Hamas, and said Hamas must comply with the West’s three demands.

Olmert says he prefers a negotiated settlement with the Palestinians but considers talks impossible as long as Hamas remains committed to Israel’s destruction. If peacemaking efforts founder, Olmert plans a unilateral withdrawal, using the West Bank separation barrier that Israel is building as the basis for a future border.

Israeli Defense Minister Amir Peretz said he would reconsider the route of the barrier to ease the plight of Palestinians in its path, his office said Monday. A string of court appeals against the barrier has held up construction and forced route changes. Four years after the project was started, it is still only about half completed.

Israel says the barrier is needed to keep suicide bombers out. But because its current route would leave about 10 percent of the West Bank and east Jerusalem on the “Israeli” side, the Palestinians condemn Olmert’s plan as a land grab.

The Palestinians claim all the West Bank and Gaza for a state, with east Jerusalem as its capital.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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