Netanyahu allows some cash into Gaza

JERUSALEM (Reuters) - Israel's new prime minister allowed the transfer of $12 million (8 million pounds) to the Hamas-ruled Gaza Strip on Tuesday, a quarter of the amount Palestinian President Mahmoud Abbas's government said it needed to pay salaries.

Middle East envoy Tony Blair met on Monday with Netanyahu, whose right-leaning government took office last week, to seek support for measures, including the transfer of cash, to bolster Abbas and his Western-backed government, headed by Prime Minister Salam Fayyad.

"This is a welcome first step but we need to ensure that larger transfers continue to be made as soon as possible and thereafter on a predictable basis so that all the necessary payments can be made to help people in Gaza," Blair said.

Palestine Monetary Authority Governor Jihad Wazir said the money that was allowed into the Gaza Strip was not nearly enough to cover the government payroll there. "At least it's a beginning. But the numbers just don't add up," he told Reuters.

Netanyahu's office had no immediate comment.

Some right-wing groups in Israel oppose the cash transfers, asserting that Gaza's Hamas Islamist rulers could benefit.

Palestinian officials in the West Bank say that assertion is unfounded, citing the use of safeguards such as direct deposit to prevent the money from going into unauthorised accounts.

Blair's office said Israel allowed the transfer of 50 million shekels (8 million pounds) from bank branches in the West Bank to bank branches in the Gaza Strip.

Abbas's government had requested permission to transfer 200 million shekels ($48 million).

ISRAEL PRESSURED

Israel has been under pressure for months from Blair, the World Bank and the International Monetary Fund to lift its restrictions on cash transfers to the Gaza Strip, which Hamas seized by force in 2007 after routing forces loyal to Abbas's secular Fatah faction.

They argued that Israel was undermining the Palestinian banking sector, making it harder for Gazans to cover basic needs and undermining Abbas's standing in Hamas' stronghold.

Since the end of Israel's 22-day Gaza offensive in January, Hamas, which receives support from Iran, has paid salaries to its own workers. But Fayyad has struggled to do so because of the shortage of currency in the territory.

In February, then-Israeli Prime Minister Ehud Olmert allowed the transfer of $43 million to the Gaza Strip, short of the $58 million requested by Fayyad at the time.

In December, Israel allowed armoured trucks carrying $25 million to enter Gaza.

(Editing by Ari Rabinovitch)