The United States expressed concern Wednesday about tens of thousands of Palestinians pouring into Egypt from Gaza across a broken barrier erected at the border. "We are concerned about that situation and frankly I know the Egyptians are as well," State Department deputy spokesman Tom Casey said. David Welch, the assistant secretary of state for the Middle East, has talked to Egyptian authorities about the situation, Casey said, but he didn't offer details. He said the Egyptians take border security seriously and that he has no indication the situation has affected Israeli-Palestinian relations for now. Tens of thousands of Palestinians on foot and on donkey carts poured into Egypt from Gaza Wednesday after masked gunmen used land mines to blast down a seven-mile barrier dividing the border town of Rafah. The border breach was a dramatic protest against the closure of the Palestinian territory, imposed last week by Israel. The Palestinians were stocking up on goods made scarce by the Israeli blockade. The border fence had divided the Rafah area into two halves, one on the Egyptian side and one in southern Gaza. Earlier Wednesday, Secretary of State Condoleezza Rice offered a muted response, saying in Switzerland that the US wants to see stability in the region, but that "most importantly both the security concerns of Israel and the humanitarian concerns of Gazans be met." Security officials expressed concern with Egypt's decision to open Rafah and allow the Palestinians to cross into the Sinai and return without inspections. The officials said that the opening of the crossing enabled dozens of terrorists to leave the Gaza Strip and return with weaponry, money and new terror skills. Earlier in the month and against Israeli objections, Egypt allowed thousands of Palestinians, who had traveled to Mecca for the annual Hajj pilgrimage, to return to Gaza via the terminal. At the time, defense officials said that terrorists who returned to Gaza were carrying $100 million and that some of them had traveled to Iran and Lebanon for military training. "It is likely that there is a significant number of terrorists who left Gaza today," a defense official said. "They are probably returning now with money and weaponry." Defense Minister Ehud Barak said that Israel expected Egypt to fulfill all its obligations, Channel 2 reported. He also said Israel would not cease its military campaign to stop rocket fire from the Gaza Strip. Palestinian Authority Prime Minister Salaam Fayad argued that Gaza's borders should be opened officially, and also pressed for an end to Israeli settlement expansion. "The Palestinians in Gaza get only very little, which is just enough to survive," Fayyad said through an interpreter after meeting German Foreign Minister Frank-Walter Steinmeier. "What happened yesterday and today is clear evidence that the situation cannot remain this way and that it is important to open the crossings again officially." He did not elaborate on how the crossings should be opened. Fayad also underlined the importance of Palestinian concerns over Israeli settlement construction - a key obstacle to past peace talks, and an issue that recently has returned to complicate current peace efforts. "It is important that we continue working to stop these settlement activities and thus create the opportunity to progress further," he said. Steinmeier and Fayad also discussed projects to improve living conditions for Palestinians with help from the German government and companies. Steinmeier said the plans included a new kindergarten and a new community center on the West Bank, as well as expanding four schools.