It emerged late last week that 3,500 Hamas "security-force" salaries had been paid by the Fatah-led Salaam Fayad government in Ramallah. At first this was passed off as computer error, corrected only after 1,000 of the beneficiaries had managed to withdraw the money from their bank accounts in Gaza. Now "investigations" are reported in progress. The latest version is that a higher-up in the PA Finance Ministry may have been bought off by Hamas and remitted the funds without authorization. This episode has caused a considerable stir inside Fatah and rather less of one elsewhere, including in the Hebrew media. Yet the fact that money from ostensible moderates made its way to incontrovertible fanatics is telling. Something is seriously wrong in Mahmoud Abbas's Palestinian Authority if, quite apart from continuing to pay the salaries of Hamas parliamentarians and, reportedly, planning to buy them all new $70,000 cars as well, it ends up underpinning the very militiamen who so violently expelled Fatah from Gaza in June. Whatever excuse is finally officially adopted by Ramallah, this is no minor error. It can only deepen the doubts about how far the PA can be trusted, even under the financial stewardship of the ostensibly responsible Fayad, a man with a credible professional background in whom Israel and the international community have placed so much faith. What makes this incident particularly galling is the fact that only a few weeks have passed since the Israeli government, following much heated public debate, reluctantly decided to transfer to Ramallah NIS 400 million of tax revenues that had been withheld out of the fear that such funds would reach Hamas and be used to bankroll its terrorist schemes. Fayad and PA Chairman Abbas were judged trustworthy and deserving of Israeli support; now some of these funds have ended up precisely where Israel was solemnly assured they would not. The initial knee-jerk excuse of a computer error was too derisory to maintain for long. Now a Ramallah Treasury official has been arrested, but it is far from clear whether he will be charged or if the probe into the matter will be in earnest. The understandable apprehension in Israel is that the PA has much to cover up and that nothing is quite as innocent as it is being made out to be. Some in Hamas have depicted the payments as a Fatah conciliatory or "goodwill" gesture." That is certainly the case as regards the legislators' salaries and cars. Indeed, persistent buzz exists about a possible rapprochement between Fatah and Hamas. Contacts, encouraged by Egypt, are underway with an eye to resurrecting the national unity government, and other Arab nations are offering to help, with Abbas apparently opposing an accommodation even as many of his officials support it. A modicum of normalcy has already been achieved between the PA's warring halves, which have renewed cooperation on a variety of fronts, including on education and health. Mostly this is kick-started by Hamas initiatives, with Fatah taking the bait. Hamas is plainly playing for time and judging that Abbas cannot survive long in office. The Islamists, who already control many West Bank local councils, are betting on a further deterioration of Fatah control there and recognize Fatah's abiding unpopularity and disinclination to reform itself. In short, Ismail Haniyeh's Hamas government perceives its Fatah counterpart under Fayad to be lingering on borrowed time, and thus seeks to stave off economic debacle in Gaza in the short-term; hence its overtures to Fatah. Meanwhile, Israel and the international community are pouring funds into Abbas's PA. It may that the recent transfer of some of those monies to Hamas was designed to smooth Fatah-Hamas accommodation and compromise. Even if this was not the case, however, and some of those PA funds trickled only illicitly and unintentionally into Hamas pockets, the bottom line is the same: moneys earmarked for the Abbas-Fayad leadership, for the ostensible moderates, reached Haniyeh and his colleagues. If this proves indicative of a wider financial malaise then, as with Fatah's chronic failure to stem terror, it becomes immaterial whether Fatah couldn't or wouldn't live up to its undertakings. The end result is what counts. Money is fungible. If the Hamas leadership is freed from paying wages to its underlings, it can spend its money on its favorite nefarious causes. The direct consequence of this particular episode is that PA benefactors - the US, EU and Israel included - have indirectly helped finance Hamas terrorism. Donors beware.