Egyptian officials at the Rafah border crossing allowed Palestinian Authority President Ismail Haniyeh to smuggle $20 million into the Gaza Strip when he returned from the hajj pilgrimage on Thursday, Israel Radio reported Saturday.
The Israel Radio report cited comments made to the Egyptian newspaper Al-Ahram by an Egyptian customs authority official at Rafah.
According to the official, Haniyeh "acted lawfully" by declaring the sum of cash in his possession on the Egyptian side of the crossing.
However, European officials charged with monitoring the terminal told Israel Radio that the Egyptians stated that the PA president was not carrying foreign currency.
During a meeting in Sharm e-Sheikh last week, Egyptian President Hosni Mubarak reportedly told Prime Minister Ehud Olmert that Egyptian law does not obligate individuals to declare the amount of money in their possession when they leave the country.
The Israeli government said it was disturbed by Hamas's practice of smuggling money into Gaza and that it had raised this issue with the Egyptians.
A government minister told Israel Radio that Olmert is expected to raise the subject of the cash smuggling when the cabinet convenes its weekly meeting on Sunday.
Last month, Haniyeh was stopped when he tried to bring $35 million into Gaza, and was not allowed to enter the Gaza Strip until he had deposited the money in an Egyptian bank.
The EU is a neutral, third party monitor at the Rafah crossing. It has a mandate to report on activity at the crossing, but it has no authority to impose conditions. The issue of cash smuggling through Rafah is of particular concern to Israel and other Western governments, who fear the funds are going to support terrorism - either directly or through the Hamas-led government.