Hamas promised to "deal a painful blow" to Israel in retaliation for the Thursday death of six Palestinians during an IDF operation in Khan Yunis. The Palestinians believe that the operation was aimed at exerting pressure on Hamas to release kidnapped Cpl. Gilad Shalit.
Meanwhile, a Palestinian Authority official welcomed a decision by the European Union to provide aid to an additional 60,000 Palestinian families as part of a program to bypass the Hamas-led government.
The expansion, made possible by Europeans member states boosting funds to the international aid program overseen by the World Bank, will now cover 160,000 families in the PA territories.
In Ramallah, a senior PA official welcomed the decision, expressing hope it would mark the beginning of the end of the international sanctions on the PA.
"We welcome this decision and urge the international community to end sanctions imposed on our people," he told The Jerusalem Post. "We hope that this move would help alleviate the suffering of the Palestinians."
He added that thousands of Palestinian families will benefit from the money. "This money will not go to the government, but directly to the people who need it," he said.
But Israel said the funds in no way altered the demands of the Quartet - the US, the EU, Russia and UN - that required Hamas to accept Israel and end violence before money would flow freely to the PA.
"We don't know of any change of policy in the European money [going] to the Palestinian Authority," said a Foreign Ministry spokeswoman.
And Asi Shariv, spokesman for the Prime Minister's Office, said that "any aid to the Palestinian citizens is welcome as long as it's not getting to Hamas." He indicated that the government would carefully watch where the money goes.
The EU funding mechanism offers a NIS 1,500 stipend to poor families, pensioners and certain civil service workers, whose paychecks disappeared when international donors halted direct aid payments after Hamas won the Palestinian Legislative Council elections in February.
The special funding program was set up in June to direct funds to three key areas - support for health services, utilities and social allowances - while bypassing the Hamas-led government. The Quartet agreed last month to expand the scope of the program.
Overall EU founding increased from the average rate of â‚¬500 per year to â‚¬650 this year. EU spokeswoman Emma Udwin told the Post the money will go to many established programs, such as UNRWA. "The total this year comes out higher than average because of the financial crisis in the territories," she explained.
Of that funding, the EU donated â‚¬105 million as part of the Quartet-approved mechanism to bypass Hamas in June that was used for the first three months; now an additional â‚¬92m. has been donated for the next three months by individual member countries and Norway.
"None of this money is going to the Palestinian Authority, and none of it is going to the Hamas-led government," she insisted. "The money is not supplying the Hamas-led government. It's not passing through the Hamas-led government. There's no way that Hamas ministers can make use of this money.
"We can't work with the government, but that is no argument for allowing what is already a financial crisis to become a catastrophe."
In Gaza City, a spokesman for Hamas's military wing, Izaddin al-Kassam, said his group was preparing "big surprises" for Israel. "The Kassam has prepared itself for a major confrontation with the enemy," the spokesman, who identified himself as Abu Obaidah, told the Bethlehem-based Maan News Agency. "We have prepared a number of painful surprises for the enemy."
He also warned Israel against invading the Gaza Strip to try to release Shalit. "Such an invasion will be a catastrophe for the enemy," he said. "We have developed our fighting skills and acquired more weapons which will surprise the enemy."
A spokesman for the Popular Resistance Committees, an alliance of several armed groups, announced that Shalit would not be released "even if Israel wipes out the entire Gaza Strip."
The Popular Resistance Committees is one of three groups believed to be holding him.
"Israel will not get its soldier even if it carries out large-scale military operations in the Gaza Strip," said the spokesman, Abu Mujahed. "The Israelis will never find the soldier. The only way to resolve this case is by conducting negotiations through a third party."
In another development, unidentified gunmen shot and killed Ali Shakshak, 35, an officer with the PA's General Intelligence Force in the Gaza Strip.
The attack took place in Gaza City as Shakshak was about to leave his home. No group claimed responsibility, although some Fatah officials said they did not rule out the possibility that the officer was yet another victim of the ongoing power struggle between Hamas and Fatah.