$804,000 seized from Hamas official

Rafah: Border guards confiscated 639,000 euros from a Hamas official crossing the border from Egypt into Gaza on Friday.

"(Hamas spokesman) Sami Abu Zuhri did not declare the money. The Palestinian security and customs officials found it and confiscated it," European Union observer, Julio de la Guardia, said.

Travellers crossing through Rafah must declare all sums over $2,000 and explain the origin of the cash, de la Guardia told reporters.

Zuhri is thought to have been returning to the Gaza Strip from Qatar - a country which has previously pledged to donate $50m to the Palestinian Authority.

A Palestinian security source said Hamas spokesman Sami Abu Zuhri refused to leave the terminal without the money, which was confiscated by Palestinian customs agents.

After negotiations the money was returned to the Zuhri, and he was allowed to go.

Facing a US -led funding and banking blockade, the Hamas-led Palestinian Authority has been unable to pay salaries to 165,000 government employees.