Palestinian security forces confiscate $817,000 at Gaza-Egypt border

Palestinian security forces loyal to President Mahmoud Abbas confiscated Ђ 639,000 ($817,000) from a high-profile Hamas official who tried to smuggle it in from Egypt on Friday, a European Union spokesman said, in a possible sign of how desperate the cash-starved Hamas government is for money.

Earlier Friday, a gun battle erupted for the first time between police loyal to Palestinian President Mahmoud Abbas and a new security force the Hamas government deployed in defiance of Abbas' ban, edging the rivals closer to a wider spasm of violence.

The Hamas official, spokesman Sami Abu Zuhri, wasn't immediately available to comment on the incident at the Gaza-Egypt passage at Rafah.

Palestinian officials said Abu Zuhri was on his way back from Qatar, whose government has pledged to give the Palestinian Authority $50 million ( Ђ 39 million), but has been stymied by Western economic sanctions on the militantly anti-Israel Hamas government.

Julio De La Guardia, a spokesman for a European Union contingent that monitors the crossing, said travelers crossing through Rafah must declare all sums over $2,000 ( Ђ 1,600) and explain its origin.

"He (Abu Zuhri) did not declare that money, he tried to smuggle it," De La Guardia said.

The Hamas government has been broke since the West and Israel dried up hundreds of millions of dollars in aid because of Hamas' refusal to disarm and recognize Israel .

The cutoffs have rendered Hamas unable to pay two months of back wages to government employees who provide for one-third of people in the already impoverished West Bank and Gaza Strip.

Dozens of Hamas gunmen blocked the crossing after the money was confiscated. Abu Zuhri was escorted out of the terminal by Ghazi Hamad, a Hamas government spokesman, and a political adviser to Prime Minister Ismail Haniyeh of Hamas.

Meanwhile, two policemen and a Hamas gunman were wounded in the gunfight near the Palestinian parliament building and the police headquarters, symbols of the power struggle between Hamas and Abbas' Fatah party, reports the AP.