Hamas PM held at border with $35m stash

Israel yesterday stopped the Palestinian prime minister Ismail Haniyeh from crossing into Gaza carrying a reported $35m (£18m) stashed in suitcases.

The standoff of several hours, which only ended last night when Mr Haniyeh crossed into Gaza without the money, triggered an outbreak of violence as hundreds of Hamas militants stormed the Egypt-Gaza border point at Rafah. Witnesses said members of Mahmoud Abbas's Fatah-dominated presidential guard, responsible for Palestinian security at the terminal, had opened fire at the outset of a series of gun battles at the border between the two factions which left 19 people wounded including Mr Haniyeh's son. Last night Mr Haniyeh, who announced on Monday in Tehran that he had been promised $250m for the Palestinian Authority by Iran, finally crossed from the Egyptian town of El Arish after an agreement with Israel brokered by Egypt that he could pass through the terminal provided he left the cash behind.

More gunfire broke out after Mr Haniyeh's convoy crossed into Gaza, witnesses said. The deal meant that the money would be handed to the Arab League's account for the Palestinians, which should ensure that it would be used to meet social and economic need rather than for military purposes by the faction, Israeli officials said.

An Associated Press reporter at the scene said that earlier, travellers hoping to cross the border had run for cover, with women and children hiding behind walls and taxis, as the presidential guard fired on militants seeking to overrun the area. Two loud explosions were heard later as militants reportedly blew a hole in the border wall about half a kilometre from the crossing.

The Hamas militants had chanted "God is great, let's liberate this place ", and taken over the arrival hall as border guards escorted the European monitors entrusted with supervising the crossing to safety. Witnesses also said that computers and other equipment in the terminal had been destroyed by militants.

The EU monitors were told in discussions with the Presidential Guard that there had been injuries in the fracas. AP also reported that gunfire erupted again several hours later.

Witnesses said that Hamas gunmen had fired at the Egyptian side of the border, drawing return fire both from Egyptian security forces and presidential guards dominated by Fatah.

Interfactional Palestinian tension has sharply increased after the killing of the three sons of an intelligence officer loyal to Mr Abbas on Monday.

The decision to bar Mr Haniyeh by closing the border for several hours ­ made by the Israeli defence minister Amir Peretz ­ was far from automatic since other Hamas officials have been allowed through Rafah with money in suitcases, most notably the Palestinian foreign minister Mahmoud Zahar who brought $20m into Gaza in June.

Hamas officials insist that having to resort to bringing donated cash through the crossing was a direct consequence of the Israeli and international boycott of the Palestinian Authority, mounted in response to Hamas's election in January.

Ghazi Hamad, the Hamas Cabinet spokesman, who had been with Mr Haniyeh, said in El Arish that Hamas had a duty to ensure that Palestinians did not " starve" because of the "siege".

He added: "We cannot accept what is going on without doing anything.

It is a Palestinian crossing not an Israeli crossing and we should be able to take the money through without a problem."

Mark Regev, the Israeli foreign ministry spokesman, said last night: " It has never been about preventing Mr Haniyeh from entering Gaza. The issue is the money ­ tens of millions of dollars which can be used to help the terrorist wing of Hamas, including to fire rockets."

On the fact that Hamas officials had previously been allowed in with cash, Mr Regev said: "It has been going on too long and we wanted to put a stop to it."

* The Israeli Supreme Court last night largely upheld the policy of targeted assassinations of militants. The unanimous ruling fixed some legal limits, but it did not insist on prior court approval for the attacks, leaving the limits only theoretical and endorsing the killings in practice.