Barak approves transfer of NIS 100m to Palestinian banks

As Israel's leaders met Wednesday to discuss its military options following increasing numbers of missiles being launched into the western Negev from the Gaza Strip, the government approved transferring 100 million to Gaza banks.

Defense Minister Ehud Barak agreed to transfer NIS 100 million ($25 million) to Gaza from banks in the West Bank. The transfer is expected to take place within the next few days.

Barak's decision came after special appeals were made to help ease the cash shortages in Gaza from both the Palestinian Prime Minister Salam Fayyad and Bank of Israel Governor Stanley Fischer.

However, right-wing faction Yisrael Beiteinu criticized Barak, saying that the NIS 100 million being transferred to Gaza will be returned to Israel in the form of 100,000 Qassam rockets. The party also accused Barak of pandering to the Palestinians.

Israel has not allowed money to enter Gaza since October, causing cash

shortages in local banks. Last week, on what was meant to be payday for tens of thousands of civil servants, many Gazans were unable to receive salaries when cash supplies ran out.

Gazans use other currencies, including U.S. dollars and Jordanian dinars, but the Israeli shekel is the territory's main currency.

Jihad al-Wazir, head of the Palestinian Monetary Authority, said the money would help but that Gaza needed a regular supply of cash. The Israeli move, he said, does not resolve the overall problem caused by an irregular inflow of cash.

Earlier, Palestinian monetary officials said they needed an immediate infusion of 250 million shekels to cover salaries.

The Gaza blockade was imposed by Israel and Egypt last year when the Islamic militants of Hamas came to power in a violent takeover of the Gaza Strip, leaving moderates only in charge of the West Bank.

The sanctions were slightly loosened in June of this year when Israel and Hamas reached a cease-fire agreement, but Israel sealed the territory again when violence erupted in early November.

Israel has largely kept Gaza crossings shut since then because militants have kept up near-daily rocket fire at Israeli towns.

Even as the decision was made to send money to Gaza, Prime Minister Ehud Olmert also met Wednesday with Defense Minister Ehud Barak and Foreign Minister Tzipi Livni to discuss the future of Israel's policy on the Gaza Strip after the ongoing cease-fire with Hamas ends next week.

Just hours before the meeting, a Qassam rocket struck the western Negev, following a two-day lull in fire from Gaza.

The prime minister would not allow any details of the meeting to be released to the public, but topics on the agenda included Israel's response to Hamas in light of the militant group's continued violations of the truce.

While Olmert and Livni have both refused to rule out an operation in the coastal territory, Barak has urged leaders to wait out the situation before taking action on Gaza.

Barak, who took part in a military drill in northern Israel on Wednesday morning, called on all parties to keep the discussion surrounding the Gaza security situation out of the political dialogue prior to the upcoming general elections.

"We will take action in the right place and time, with consideration and responsibility," Barak said. "The unnecessary talk, especially during this highly political season, doesn't advance anything and doesn't contribute to selecting the right time for action to succeed, and I recommend that everyone just stop talking and wait."

The Qassam fired early Wednesday exploded in the Sha'ar Hanegev Regional Council. No injuries or damage were reported in the attack.

On Tuesday, Olmert threatened that Israel would lash out against Gaza militants in response to a recent escalation in rocket and mortar fire from the Gaza Strip.