Israelis Seize Cash From 2 Palestinian Banks

Israeli soldiers and police raided branches of two banks in the West Bank city of Ramallah on Wednesday, seizing millions of dollars in cash from accounts the government said helped finance Palestinian militant groups in attacks against Israel.

Israeli officials said the action -- its first to target Palestinian banks in more than a year -- was an attempt to block the flow of foreign money that they maintain is funneled to groups such as Hamas and Islamic Jihad, which have been responsible for most of the suicide bombings on Israeli soil during the 41-month Palestinian uprising.

The money seized, in Israeli shekels, was equal to about $7 million to $9 million, authorities said.

Israel has long said that militant groups get their financial backing from foreign sources, including the governments of Iran and Syria and the Hezbollah militant group in Lebanon. In Wednesday’s action, Israeli agents examined hundreds of accounts of people and charities that attracted suspicion during a long investigation, officials said.

“Today it’s possible and easier to detect the mechanism of terrorism,” said a senior Israeli security source who briefed reporters on the condition of anonymity. “What we did was like catching the terrorist when he’s driving with the bomb on his back.”

Palestinian officials said the raids violated an Israeli promise to leave Palestinian banks alone and would only worsen the troubled economy of the West Bank and Gaza Strip by undermining consumer confidence in the financial institutions.

“It’s part of the Israeli effort to destroy the Palestinian economy,” said Saeb Erekat, the chief Palestinian negotiator.

Amin Haddad, governor of the Palestinian Central Bank, said the operation breached “all agreements and principles that govern banking relations between Israel and the Palestinian Authority.”

The U.S. was critical of the raids. “We would prefer to see Israeli coordination with the Palestinian financial authorities in order to stem the flow of funds to terrorist groups,” State Department spokesman Richard Boucher said.

During the operation, Israeli forces declared a curfew in one section of downtown Ramallah -- home to the headquarters of Palestinian leader Yasser Arafat -- as youths threw rocks at soldiers. Israeli troops fired rubber bullets and tear gas to disperse the crowds, injuring 42 people, said a Ramallah Hospital official quoted on Palestinian radio.

The bank raids came three days after a suicide bombing on a Jerusalem bus killed eight people and injured scores. Israel holds Hezbollah responsible for helping to pay for that bombing, as well as a Jan. 29 bus attack in Jerusalem that left 11 dead.

The operation also coincided with the conclusion of a three-day hearing at the International Court of Justice in The Hague on the legality of a 452-mile barrier Israel is building in and around the West Bank. Israel maintains that the barrier is needed to keep out suicide bombers, but Palestinians say it is an effort to seize land.

A day before the bank raids, Avi Dichter, who heads the Shin Bet, Israel’s domestic security service, charged that Hezbollah had sent thousands of dollars to the families of suicide bombers.

Another Israeli official, Yuval Steinitz, who chairs the parliament’s foreign affairs committee, charged that Hezbollah paid a bonus for each Israeli killed in an attack. The group denied the charge, saying it lacked money for such payments.

During Wednesday’s briefing in Tel Aviv, the security source said money was becoming an important enticement in getting Palestinians to take part in attacks.

The planner of a suicide bombing in Netanya last year later told investigators he had been directed by Hezbollah and received the equivalent of about $2,300 from Islamic Jihad, the source said. The attack left dozens injured.

Israeli officials said payments to militants ranged from $1,500 for buying weapons for attacks to $7,000 for making a bomb for suicide attacks.

The raids Wednesday were at the Ramallah branches of the Arab Bank and Cairo Amman Bank.

The Jordan-based banks are owned by Palestinians. Officials said the raids targeted personal and charity accounts they believed funneled money to terrorist activities.

Early today, an Israeli soldier was killed when two Palestinians opened fire at an industrial park near the Erez crossing between the Gaza Strip and Israel, officials said. The gunmen were shot dead. The Al Aqsa Martyrs Brigade claimed responsibility.

Special correspondents Maher Abukhater in Ramallah and Tami Zer in Tel Aviv contributed to this report.