February 5, 2009 / 7:41 PM / 10 years ago

Egypt holds Hamas money bound for Gaza

ISMAILIA, Egypt (Reuters) - Hamas official Ayman Taha deposited more then $11 million (7.5 million pound) in cash in a bank in the Egyptian town of El Arish on Thursday after Egyptian authorities stopped him taking it home to Gaza, police sources said.

Taha, heading to Gaza after talks in Egypt, later crossed into the Palestinian coastal strip without the money, $9 million in dollars and 2 million euros (1.74 million pound), they said.

The money is in an account at the state-owned National Bank of Egypt in El Arish in northern Sinai in the name of an Egyptian government body, they said.

It was the first known attempt by a Hamas official to take large quantities of money into Gaza since Hamas took control of the territory in June 2007.

Taha was part of a Hamas delegation which has been in Cairo this week for talks with Egyptian intelligence on a long-term truce between Israel and armed Palestinian groups in Gaza.

At the Rafah border crossing between Egypt and Gaza, Egyptian border authorities let through the other five members of the Hamas team but held back Taha because of the money.

Police sources said initially the authorities were contacting the Egyptian finance ministry to ask for instructions. The Finance Ministry did not comment

On two previous occasions before June 2007 Egypt allowed the Palestinian foreign minister at the time, Mahmoud el-Zahar of Hamas, to go back into Gaza carrying about $20 million in cash each time.

The money was needed to pay salaries at a time when Western sanctions made bank transfers difficult.

The sanctions are still in place and Israel also recently prevented the Western-backed Palestinian Authority from transferring cash to the Gaza Strip to pay its staff there, according to Western and Palestinian officials.

Reporting by Yusri Mohamed, writing by Jonathan Wright, editing by Angus MacSwan

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