A senior Hamas official today tried to sneak £434,000 into the Gaza Strip, hiding 500-euro bills in a white pouch tucked under his shirt in the first major cash smuggling attempt by an increasingly desperate Hamas government choked by Western economic sanctions.

Western peacemakers were to meet today to consider how, or whether, to help Palestinians out of their financial crisis, with growing evidence that sanctions against the Hamas-led government are causing grinding poverty that could ignite violent rage.

Palestinian leader Mahmoud Abbas indefinitely postponed forthcoming parliamentary elections today, giving his struggling Fatah party time to fend off a growing challenge by Hamas.

Israel will not move forward in the US-backed road map peace plan if Hamas participates in Palestinian legislative elections without disarming, an aide to Prime Minister Ariel Sharon said today.