Israel blocks Palestinian PM Haniyeh's return to Gaza

Mr Haniya is said to be carrying tens of millions of dollars in donations from Iran.

Hamas militants reacted angrily to the closure, storming the border point and taking it over from Palestinian guards.

Hamas sources now say Mr Haniya is to return without the money and others in his delegation will bring it in later.

Since the election of Hamas earlier this year, there has been a Western-led boycott of the government.

Hamas has been unable to pay the salaries of tens of thousands of its workers and has partially circumvented the boycott by officials carrying in millions of dollars.

Factional tension

Israeli Defence Minister Amir Peretz had ordered EU monitors to close the Rafah crossing, Israeli sources said.

Mr Haniya was due to return to Gaza on Thursday after cutting short his first trip abroad as PM to deal with mounting tensions between Hamas and rival faction Fatah.

Inter-faction tensions have increased since the killing of three sons of a pro-Fatah security chief on Monday.

Israel said Mr Haniya would only be allowed to cross into Gaza if he left the money - which is reported to total more than $30m (£15.3m) - on the Egyptian side.

Israel says that money, in particular from Iran, goes directly to the funding of "terrorist" operations against Israel.

Palestinian and Egyptian officials say Mr Haniya's convoy is making a second attempt to cross and Israel has agreed to allow Mr Haniya to return, without the money. However, this has not been confirmed by Israel.

'Chaos'

The closure sparked gunfire at the crossing point.

The Palestinian presidential guard, responsible for security there, began firing at Hamas militants, according to an Associated Press news agency journalist at the terminal.

Militants chanting "God is great" took over the hall.

Travellers took cover and a leading Hamas official tried to get the militants to disperse, the agency said.

"There is chaos here," said Presidential Guard spokesman Wael Dahab.

There were also unconfirmed reports of two loud explosions that had blown a hole in the Gaza-Egypt border.

Maria Telleria, spokeswoman for the EU monitoring mission, said all 16 monitors had been safely evacuated and the border would remain closed Thursday.

"Now it is dark, the monitors will not be coming back," she told the Associated Press news agency.

"But I don't know what is going to happen tomorrow."

The border is operated by European observers who have to travel from Israel to get to it.

http://news.bbc.co.uk/2/hi/middle_east/6180155.stm