Blockade Forces Gaza Banking Crisis

By Harry Kimball,  Newser Staff
Posted Dec 6, 2008 2:53 PM CST
Palestinian children from the Hamas movement carry a banner in the Gaza Strip.   (AP Photo)
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(Newser) – An ongoing Israeli embargo has cut off cash flow in Palestine's Gaza Strip and forced banks there to close, the Financial Times reports. With a Muslim holiday approaching on Monday, tens of thousands are said to be broke; some stormed an insolvent bank this week, prompting officials to shut down other banks and cash machines. Palestine saw the crisis coming and asked Israel for a cash infusion, but was rebuffed.

Battling Hamas at the time, Israel opted to boost restrictions on the flow of people, money, and goods in and out of Gaza. Hamas has, however, kept paying its members, while the Palestinian Authority was forced to stop cutting checks—deepening the rift between the two groups. Meanwhile, the territory's cash problems have forced aid organizations to curb humanitarian efforts in Gaza.