Hamas pays Gaza workers despite Israeli blockade

GAZA (Reuters) - Hamas's government in the Gaza Strip said on Monday it paid salaries to its workforce on schedule, a sign the Islamist group was asserting its authority after Israel's 22-day military offensive.

The payments underscored the challenge facing President Mahmoud Abbas's Western-backed Palestinian Authority in trying to regain a foothold in the Hamas-ruled enclave.

Israel has so far prevented Abbas's Authority, based in the occupied West Bank, from transferring cash to Gaza to pay its own workers. Israel argues that entry of the money could reduce pressure on Hamas.

It is unclear where Hamas got the money to pay employees.

During last month's war, Israel bombed smuggling tunnels under the Gaza Strip's border with Egypt to try to prevent Hamas from bringing in new supplies. But many of the secret passages were not disabled, Palestinian officials say.

"All civil and military employees of the government received their salaries in full," said Taher al-Nono, the Hamas government spokesman. "The government has no financial problems paying the salaries of its employees."

Employees of the Hamas government said they were paid their full salaries on January 28 with U.S. dollars.

Abbas's Palestinian Authority said it would pay salaries this week to workers in the occupied West Bank, but it was unclear whether it would be able to do so for those in the Gaza Strip because of the Israeli restrictions.

"Until now there is no change in the Israeli position to let us transfer cash to Gaza," Agriculture and Social Affairs Minister Mahmoud al-Habbash told Reuters in the West Bank.

Habbash said the Authority was "in communication with the international community to put pressure on the Israeli government."

Israeli officials had no immediate comment.

Hamas, which beat Abbas's secular Fatah faction in a January 2006 election and forcibly took over the Gaza Strip 18 months later, has been shunned by Western powers for refusing to renounce violence and recognize Israel.

But Hamas receives support from Iran and other regional allies and levies local taxes.

(Reporting by Nidal al-Mughrabi in Gaza, Adam Entous in Jerusalem and Ali Sawafta in Ramallah; Writing by Adam Entous; Editing by Myra MacDonald)