June 26, 2008

Contact: Nitsana Darshan-Leitner, 011.972.52.383.7020
Mike Cohen, 011.972.54.499.6453

PRIME MINISTER TO SHURAT HADIN: "ISRAEL IS TRANSFERRING HUNDREDS OF
MILLIONS OF SHEKELS TO HAMAS IN GAZA"

In an unprecedented admission, the office of Israel's Prime Minister
revealed today that it is, in fact, allowing the transfer of hundreds of
millions of dollars to the Hamas terrorist organization in Gaza due to
"Israeli diplomatic considerations."

In a response letter sent to Attorney Nitsana Darshan-Leitner, director
of human rights organization Shurat HaDin - Israel Law Center, the Prime
Minister's Office (PMO) wrote that the transfer of funds to the Hamas
controlled government in the Gaza Strip does indeed regularly take place
after
"consultations among the relevant bodies." Shurat HaDin had accused
the Israeli government of secretly transferring hard currency to the
Hamas.

"At this point," states the PMO's letter, dated June 25, 2008, "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."

The PMO's letter was dispatched to Shurat HaDin, an
organization representing hundreds of terror victims in an ongoing
global battle against terror funding, in response to a series of
warning letters from the group to the Prime Minister, the Bank
of Israel and the Israel Postal Bank, in which Shurat HaDin demanded
that all transfers of funds to the Hamas terrorists and Hamas
controlled organs in the Gaza Strip be immediately terminated. .

In the initial letter of warning sent by Shurat HaDin on behalf of
victims of Hamas terror attacks to the PMO, Attorney Nitsana
Darshan-Leitner wrote: "The currency of record in the Gaza Strip is
the New Israeli Shekel (NIS)." Most of the financial activity in the
Gaza Strip runs on a cash basis, using the NIS. Tens of thousands of
Hamas terrorists and governmental official get their salary in Israeli
currency - in cash. Thus, the transfer of large sums of cash into the
Gaza Strip is, by definition, an act that directly fuels the terrorist
activity of Hamas and is therefore a violation of the Terror-Funding
Act of 2005 and the domestic and international laws against money
laundering."

The warning letters from Shurat HaDin also note that a portion of the
cash funneled into Gaza by Israel is used to replace Israeli currency in
Hamas'
coffers that has physically deteriorated and another portion serves
the international money laundering trade, most notably the money
"smuggled" by Hamas from Iran via the Egyptian border. Without these
criminal acts, Hamas' financial hold on the Strip would collapse and thus
these measures are directly responsible for shoring up the Hamas control
over Gaza and its continued terrorist activity launched from the
region.

The PMO's letter reveals for the first time, that the Israeli government
allows and encourages the financial support for the Hamas government in the
Gaza Strip - knowingly and willingly. In reaction to the PMO's letter
Attorney Nitsana Darshan-Leitner stated that "the government of Israel
cannot fight against the Hamas terrorist organization with one hand, and
continue to secretly finance it with the other. Hypocritically, the Prime
Minister demands governments around the world isolate and and embargo the
Hamas terrorists in Gaza, and stop transferring funds to them while at the
same time he authorizes the transfer of Israeli currency into the hands of
the enemy. This government claims to be fighting against the smuggling of
tens of millions of dollars and euro into the Gaza Strip via the Egyptian
border, all the while participating in the laundering of this money by
exchanging them for New Israeli Shekels."

"There can be no doubt that the Israeli government's policy of transferring
shekels is assisting the Hamas terrorists with their missile attacks on the
Negev communities. If the Prime Minister does not immediately halt the
currency transfers to Gaza, Shurat HaDin will take all legal means available
against the government to bring this terror financing to a close."

Contact: Nitsana Darshan-Leitner, 011.972.52.383.7020

Mike Cohen, 011.972.54.499.6453

FOR A COPY OF THE SHURAT HADIN LETTER AND THE PMO's RESPONSE:

media@israellawcenter.org

http://www.israellawcenter.org