updated 2/25/2004 2:04:32 PM ET 2004-02-25T19:04:32

Israeli security forces seized millions of dollars in cash from four Palestinian bank branches Wednesday, saying much of the money was sent by Iran, Syria and Lebanese Hezbollah guerrillas to fund Palestinian militants.

Dozens of Palestinians threw stones at soldiers who clamped a curfew on downtown Ramallah during the raids. Soldiers firing tear gas, rubber bullets and live rounds injured 17 Palestinians, three of them critically, doctors said.

The raids marked Israel’s largest-scale effort yet in more than three years of fighting to stop the flow of funds to Palestinian militant groups.

Troops driving jeeps, armored personnel carriers and trucks blocked off main roads in Ramallah and declared a curfew. Shop owners were ordered to close their businesses, and residents and journalists were ordered indoors, some at gunpoint.

Bank employees — computer experts arrested overnight — accompanied troops on the raids, Palestinian security officials said. Soldiers covered up or disabled bank security cameras and confined employees to back rooms, witnesses said. Customers were allowed to leave after ID checks.

“The purpose of this operation is to impair the funneling of funds, which oil the wheels of terror against Israel,” an Israeli army statement said.

The forces took the equivalent of $6.5 million to $9 million from the bank vaults, corresponding to the amount of money found in the targeted accounts, security sources said.

Palestinians angered
Prime Minister Ahmed Qureia called the raids “very, very dangerous” and said they should be dealt with in a “very serious way.” Palestinian Cabinet minister Saeb Erekat said the raids were unjustified and could provoke a run on the banks Thursday.

“This is destructive to the Palestinian economy and people are really worried,” Erekat said.

Israeli forces checked several hundred bank accounts, some belonging to the Palestinian militant groups Hamas and Islamic Jihad, security sources said. An Israeli official, speaking on condition of anonymity, said the forces were also looking for evidence that Yasser Arafat is involved in funding terror attacks.

They took millions of shekels from the bank vaults, corresponding to the amount of money they found in the targeted accounts, security sources said. Much of the funding came from Hezbollah, Iran and Syria, the sources said.

Security sources said the seized money would be used to fund Palestinian humanitarian projects.

The raids came a day after Palestinian security officials confirmed that Hezbollah helped fund the most recent two Jerusalem bus bombings — on Sunday and Jan. 29 — which killed 18 Israelis and a foreign worker.

The Al Aqsa Martyrs Brigades’, an armed group linked to Arafat’s Fatah movement, claimed responsibility for both attacks. Security officials said Hamas and Islamic Jihad were also involved.

On Tuesday, Yuval Steinitz, chairman of the Israeli parliament’s Foreign Affairs and Defense Committee, said the Iranian-backed Hezbollah pays bonuses of several hundred dollars for each Israeli killed in a suicide bombing.

Rewards for deadly attacks
Al Aqsa militants acknowledge having received large sums from Hezbollah, including single payments of up to $50,000. They said deadly attacks were rewarded but denied there was a fixed pay scale.

Hamas and the smaller Islamic Jihad group also receive large sums from abroad. Israeli officials have said some funds were being sent in the guise of donations for Hamas-controlled charities.

In Wednesday’s bank raids, troops searched two branches of the Arab Bank, and offices of the Cairo Amman Bank and the International Palestine Bank, Palestinian security officials said. Soldiers also took over several other buildings, witnesses said.

In other developments, Israel decided to shorten the route of its West Bank separation barrier by about 50 miles to ease hardship for Palestinians, security officials said. The barrier was originally planned to run up to 450 miles.

The Palestinians say the barrier, which at times dips deep into the West Bank, amount to a land grab designed to prevent the establishment of a Palestinian state. Israel says the barrier is needed to keep out suicide bombers.

The International Court of Justice in The Hague, Netherlands, is hearing arguments on the matter this week.

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