The office of Prime Minister Ehud Olmert admitted on Wednesday that it is allowing the transfer of hundreds of millions of shekels to the Hamas government in the Gaza Strip every month. Most of the funds enter Gaza in currency exchanges for the dollars and euros Hamas smuggles into the territory following fund-raising trips to Iran and other supportive Middle East regimes. In a letter to the Prime Minister's Office earlier in the week, the Shurat Hadin Israel Law Center warned that the government was actively aiding the perpetuation of Hamas rule in Gaza, despite its own stated policies. Shurat Hadin director Nitsana Darshan-Leitner explained that without the influx of Israeli shekels, the currency of record in Gaza, Hamas would be financially unable to rule. By allowing the entry of shekels into Gaza, Darshan-Leitner noted that Israel is breaching an economic embargo of Gaza by Western powers that Israel itself insisted upon, and is helping a terrorist organization to launder money, a direct violation of the Terror-Funding Act of 2005. Worse, said Darshan-Leitner, is the fact that " the Israeli government's policy of transferring shekels is assisting the Hamas terrorists with their missile attacks on the Negev communities."
In response, Olmert's office wrote that "due to conclusions that there is an Israeli interest that the transfer of funds continue, a decision was made to continue to transfer certain sums of money to the Gaza Strip."
Shurat Hadin has threatened to sue the government both in local and international courts if the transfer of funds does not cease.