The London-based Dar al-Hiyat
newspaper reported on Tuesday that Iran would allocate $250 million to the Palestinian Authority to replace the funding withheld by Israel and the United States following Hamas' election victory.
In an interview with the newspaper, Hamas leader Khaled Mashaal said that he officially approved the Iranian support for the new Hamas-led PA.
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He summarized his visit to Teheran, saying "Iran has announced that it would support the new Palestinian government and the Palestinian people."
However, Moussa Abu Marzouk, a senior Hamas official, dismissed the report saying Tuesday that Iran had promised, "to support the Palestinian people in general, without specifying the kind or amount of support."
Abu Marzouk, in a telephone interview with The Associated Press, said this was "incorrect." He did not elaborate.
The EU and the US had said that funding to a Hamas-led government would depend on it recognizing Israel, renouncing violence and accepting the internationally-backed peace process, while Israel already decided to withhold $50m. a month in tax funds.
However, there was concern that the PA would collapse into chaos without international aid. Western diplomats were also worried that Iran, filling a funding gap, would further radicalize the Palestinians reducing Western influence.
Mashaal was due to visit Russia at the end of the week and meet with the Russian foreign minister and other officials.