Israel transfers cash to Palestinian Authority

Israel transferred €15.34m in tax revenues to the impoverished Palestinian Authority today in a move meant to ease economic conditions in the West Bank and Gaza Strip.

Palestinian Finance Minister Salam Fayad said he had received the money and denied Israeli claims that it had set conditions on the transfer.

"The Palestinian Authority refuses any conditions to get any of our frozen money from Israel. This money is the Palestinian right, which is not subject to any concessions or conditions, or any kind of external control," he said.

But Raanan Gissin, an adviser to Prime Minister Ariel Sharon, said Fayad had initially refused to accept the money because of Israel’s insistence that it be used only for humanitarian purposes.

"We don’t want the money to go to any of the Palestinian institutions where the money either goes into their pockets or to finance organisations that carry out terrorist attacks against us," Gissin said.

Israel has withheld an estimated €607m in tax money over the past 22 months of fighting, debilitating the Palestinian economy and plunging many Palestinians into poverty.

Human rights groups said many Palestinian children are suffering from malnutrition and that unemployment is rampant due to Israel’s ongoing siege.

Under international pressure, Israel has agreed to release some of the funds.

Israel says its blockades are not meant to harm ordinary Palestinians, but to stop suicide bombers reaching Israeli civilians.

A Palestinian suicide bomber blew himself up yesterday in a popular café in central Jerusalem, wounding seven Israelis.

Earlier in the day, Palestinian gunmen shot dead two Jewish settler brothers who went to sell petrol in a Palestinian village in the West Bank.

Israeli soldiers today demolished a Palestinian legislative committee building in the West Bank town of Jenin after the army said it found 660lb of home-made explosives inside.

And in Jenin refugee camp, Israeli troops arrested an Islamic Jihad fugitive, Allah Saadi, 20, sources in the militant group said.

In the Gaza Strip, meanwhile, troops entered a Palestinian refugee camp near the Egyptian border, raiding and searching homes, Palestinian security sources said.

About 10 homes were destroyed, two acres of agricultural land razed and an irrigation system destroyed, the sources said.

Israel Radio said a taxi driver had been arrested for allegedly transporting the two suicide bombers who blew themselves up in Tel Aviv on July 17. The blast killed an Israeli and three foreign workers.

Later today, civil rights activist Reverend Jesse Jackson was to meet the Hamas spiritual leader, Sheik Ahmed Yassin, in Gaza.

Hamas has claimed responsibility for dozens of suicide bombings since the start of the uprising and has vowed to avenge Israel’s killing last week of its military leader, Salah Shehadeh, in a missile strike that killed 14 other Palestinians, many of them children.