Banks take sides?

This regional tug-of-war is reflected most clearly in the cash-starved Palestinian economy.

Regional banks have also stepped into the foray as mounting concern about US anti-terrorism statues have coerced them to bar transfer of monies to the Palestinian government.

Acting Palestinian finance minister Samira Abu Either told the source that Arab and Muslim promises to support the government fell short of expectations due to the banking boycott and regional political concerns.

Promises of funding

As the war of words is replaced by armed clashes, each faction is now accusing the other of being beholden to foreign interests.

During a visit to Ramallah, US Secretary of State Condoleezza Rice pledged $20 million to build up armed forces that report to the Palestinian president directly.

A Palestinian boy lies down in road during fighting, Beit Hanoun, Gaza

Days later, Reuters reported that the US was also giving $42 million to help support political alternatives to Hamas.

Now Iran has pledged to give Palestinians $250 million in aid, some in direct funding for the government and another portion in agricultural subsidies and development.

These commitments fall short of the government’s annual budget, most of which comes from tax revenues currently frozen by Israel.

 “We don’t deny that the Palestinian field is complicated,” interior minister Sayid Siam said in an interview posted on a Hamas website during an October visit to Iran, “but at this time, we reject that there are Palestinian ‘sides’.

“This is a part of the plot or part of the pressure on the Palestinian government.”

Border clash

When Haniya was stopped at the Rafah crossing from entering Gaza last week, it was reported he had been carrying millions of dollars for the cash-strapped government he leads.

A gun battle ensued when his guards tried to force their way through, and several people were killed and injured. Haniya was reportedly allowed to enter without the finances he was carrying.

Hamas blamed Abbas for caving in to US and Israeli pressures.

Pressure and backlash

The arming of competing Palestinian factions is reminiscent of the Cold War era where disputes between major powers were fought by proxy.

Ismail Haniyeh has toured the region to raise funds for the Hamas government

“Any help from the Americans, whether in South America, in Europe, or in Asia causes those who have direct support from the Americans to become weak,” says Fatah activist Qadura Fares.

While Fares is not opposed to accepting US grants, he argues that open US support for Fatah will backfire.

“I believe that the Americans like this situation,” he told Aljazeera.net.

“Hamas remains in the framework of terror, and Fatah is a bit like the collaborator of the Americans and the Israelis. Then Palestinians don’t believe in Fatah or Hamas, and the Israelis continue their planning, building settlements and creating a new atmosphere in Palestine.”

Hamas leaders, on the other hand, say they are unfazed.

Minister of prisoner affairs Wasfi Kabaha is confident that the public will see through attempts to manipulate local politics for regional change.

“Palestinian society is sensitive and transparent,” he told sources.

"Any party can [try to] interfere in internal relations, but the Palestinian public has formed a consensus."

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