Mahmoud Zahar, the Palestinian Foreign Minister, evaded the international boycott on Hamas by bringing up to $20m (£11m) in a several suitcases into Gaza through the border crossing with Egypt at Rafah.
Security officials answerable to Mahmoud Abbas, the Palestinian President, took control of the suitcases, but Mr Abbas confirmed yesterday that the money would be turned over intact to the Finance Ministry, which is also controlled by Hamas.
Dr Zahar, who has been on an international fundraising tour, openly told the security staff that he was carrying a large sum of money through the crossing which is operated by presidential forces and monitored by the EU.
Julio de la Guardia, a spokesman for the EU monitoring mission, said that while Dr Zahar's bags were X-rayed at the border as part of the normal security screening process, the bags were not opened because as a minister, Dr Zahar has a "VIP 1" status, the highest classification for dignitaries passing through the international border.
Members of the Palestinian Legislative Council are classed as VIP 2 and ministry director generals and officials of equivalent rank as "VIP 3".
Mr De La Guardia said he could not say exactly how much money was brought in, though he said that the monitoring mission had been expecting Dr Zahar to be carrying cash after a tour which has taken him to Indonesia, Malaysia and Brunei. Dr Zahar has also recently visited China, Pakistan, Iran and Egypt.
Walid Awad, of Mr Abbas's office, said that the move by Dr Zahar had put Mr Abbas in a "dilemma". On the one hand he was unhappy at the move, which he saw as an "amateurish" way of increasing revenue. On the other he could not be seen as objecting to the import of cash to alleviate the increasing poverty of Palestinians as a result of the international boycott. Mr Abbas believed the solution was political and that Hamas should sign up to his presidential programme of seeking a two-state solution.
Meanwhile, a Hamas gunman was shot dead after he and other masked militants exchanged fire with passengers travelling in a car with Refat Kullab, head of the Fatah-dominated Palestinian Preventive Security Service in the Gaza town of Khan Younis. Hamas officials said Preventive Security members in Mr Kullab's car fired first.
Security sources said Mr Kullab was wounded in both legs and was in a moderate to serious condition.
In Ramallah there were angry scenes when about 1,000 government workers protested outside the parliament building at the non-payment of their wages. Some of the protesters climbed on top of the parliament members' desks and threw paper and water bottles, prompting several Hamas members to leave as the crowd grew angrier.
The International Crisis Group warned that Palestinians were "inching towards civil war" and that relations between Israel and the Palestinians were "heading for a catastrophic breakdown". Its report was also critical of international "strategies to dislodge Hamas", declaring that a "more nuanced approach" was required to encourage Hamas to adopt more pragmatic policies".Reuse content