Iran has donated $120 million to the Palestinian Hamas-led government and has said it is ready to give more, Palestinian Foreign Minister Mahmoud al-Zahar said on Thursday.

Tehran said in April it would donate $50 million to help make up a shortfall left when the West cut off aid to the government led by the Palestinian Islamic group, which seeks to destroy Israel.

"Iran has so far given $120 million to the Palestinain government and they have told us that they will provide more financial help," Zahar told reporters in Tehran after talks.

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Iran's Islamic government has never recognized Israel and Iranian President Mahmoud Ahmadinejad peppers his speeches with anti-Israel remarks. Last year, he called for Israel to be "wiped off the map".

Meanwhile, two Hamas lawmakers were permitted to cross into Gaza from Egypt on Wednesday carrying $4 million in cash in their suitcases.

Due to the embargo, a number of Palestinian officials have carried over large amounts of Arab-donated cash into the Palestinian territories. Last month, Palestinian Interior Minister Saeed Siyam was allowed to carry $2 million over in his luggage. Palestinian law permits cash to be carried over the border as long as it is declared.

Arab foreign ministers vowed earlier this week to break the Western freeze and find a way to supply Palestinians with aid.