Gaza's Hamas rulers fail to make salary payments

By Nidal al-Mughrabi

GAZA, Feb 8 (Reuters) - Hamas has failed to pay the January salaries of many of the 34,000 Palestinian civil servants and security men in the Gaza Strip, raising concern among them that the globally isolated Islamist group is facing a cash crisis.

"They paid some minor employees whose salaries were under 1,000 shekels ($260)," one police officer, who identified himself only as Abu Anas, said on Monday. "I am worried there is a financial problem."

Other Palestinians on the government payroll in the Hamas-ruled Gaza Strip also told Reuters they had not been paid.

A senior official at the Hamas-run Finance Ministry blamed the delay on new "technical procedures" under which cash is distributed at post offices and the newly established Palestinian Islamic National Bank.

"We have divided the employees into categories depending on their salaries. We began paying those with small salaries and I hope by end of this week all the other employees will be paid," he said.

Hamas usually settles its $16 million payroll at the beginning of each month and the delay raised speculation in Gaza that Egypt's construction of a metal barrier to cut off cross-border smuggling tunnels could have caused a cash crunch.

A Palestinian Authority official has said Hamas uses tunnels to bring in money to pay employees. Hamas has said only that it has used means "above ground and underground" to import cash.

The United States and Israel have led a world embargo against Hamas since it defeated Palestinian President Mahmoud Abbas's Fatah movement in a 2006 election.

Israel tightened the blockade in 2007 when Hamas security forces took over the territory, ousting forces loyal to Abbas.

Israel and Palestinian officials loyal to Abbas have said the Hamas government receives Iranian funding alongside tax revenues and other foreign donations. (Editing by Kevin Liffey) (For blogs and links on other Israeli and Palestinian news, go to blogs.reuters.com/axismundi)