VARIOUS: Israel's biggest commercial bank says cutting Gaza ties

Israel's biggest commercial bank says it is severing its business ties with Palestinian banks in the Gaza Strip in response to the Israeli government's classification of the territory as an enemy entity. The announcement could force banks in the Hamas-controlled Gaza Strip to close if other Israeli institutions follow suit and stop transferring Israeli currency to them. Israel's biggest commercial bank said on Tuesday (September 25) it was severing its business ties with Palestinian banks in the Gaza Strip in response to the Israeli government's classification of the territory as an enemy entity. A Palestinian banking official said Bank Hapoalim's move could force banks in the Hamas-controlled Gaza Strip to shut down if other Israeli institutions follow suit and stop transferring Israeli shekel notes to them. "In light of the government's decision to declare the Gaza Strip hostile territory, Bank Hapoalim has decided to terminate its banking activity with banks and branches in the Gaza Strip," the Israeli bank said in a statement. A Hapoalim spokeswoman said it would take several weeks for the bank to completely cease its services to Gaza's financial institutions. Residents on the streets of Gaza viewed the move as collective punishment and feared their already impoverished conditions will deteriorate. "One hundred percent, this will affect all the people, all the people from different classes in Gaza will be affected by the closure of the Banks and the stopping of the money transfers. There are exchanges between Palestinian and Israeli businessmen and between banks locally and abroad, of course the economic situation and will become even worse than it is and it is already very bad," said Gaza resident Aref Ahmed. Bank employee Said AlMasharawi told Reuters that the move would result in difficulties for companies in paying salaries to staff. "There will not be a closure but it will affect the average resident dealing with the Israeli shekel. Especially when it comes to paying salaries, the banks will not have enough cash available to give salaries," he said. Israel declared the Gaza Strip an "enemy entity" last Wednesday and said it would reduce its fuel and power supplies to the territory in response to rocket attacks by Palestinian militants. It has yet to carry out any cuts and pledged to keep humanitarian aid flowing. Hamas spokesman Fawzi Barhoum criticised the move. "It is clear that there is an Israeli-American policy that is being implemented against the Palestinian people using the siege, the strangulation, by drying the water resources, stopping medicine and goods from entering and being delivered to our Palestinian people. This comes in preparation to the fall conference which is coming up, in order to force the Palestinian people into submission by starving them so they will give in the to American dictation and to agree to stolen resolutions which will erase Palestinian rights," said Barhoum. Hamas, an Islamist group that opposes Palestinian President Mahmoud Abbas's peace moves with Israel, violently took over the Gaza Strip in June. By formally defining Gaza as enemy territory, Israel could argue that it can not be bound by international law to supply utilities and services to its 1.5 million people. U.N. officials have challenged that contention. Israel withdrew troops and settlers in 2005 from the Gaza Strip but Palestinians say it is still occupied because Israel controls its air, land and sea borders.

ITN Source | September 26, 2007

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