Israel prevented Palestinian Prime Minister Ismail Haniyeh returning to Gaza from a trip abroad today to stop him bringing in money donated by Iran.
An official source at the Rafah crossing between Egypt and Gaza said Haniyeh, a leader of the governing Hamas movement, was carrying $35 million of cash in suitcases.
An Israeli security source said Israel had "indications" that Egypt, which has allowed Hamas officials to pass through the border with funds in the past, had confiscated all or some of the cash in Haniyeh's possession.
The source suggested Haniyeh would be allowed to cross without the money once European border monitors who had been evacuated returned and the crossing reopened. A source at Rafah said two of Haniyeh's aides would remain behind with the cash.
"We are awaiting the return of the Europeans so that we can cross tonight," Haniyeh told a Hamas radio station. "Soon I will be with you."
Israeli security sources said Defence Minister Amir Peretz had given the order to close Rafah after receiving information that Haniyeh was trying to bring in money donated by Iran in his 2-week fund-raising tour.
Haniyeh has visited countries including Qatar, Iran and Sudan to raise money for his government, which has struggled to function due to international sanctions including financial restrictions imposed after Hamas's election win in January.
The Israeli move ratcheted up tensions in the Gaza Strip, where a showdown between Hamas and the rival Fatah movement of moderate President Mahmoud Abbas has boiled over in recent days into a series of killings.