JERUSALEM - Israeli soldiers raided four banks in the West Bank city of Ramallah yesterday, seizing millions of dollars that they said was funneled from Iran, Syria and Lebanon to Palestinian militants for attacks on Israelis.
Soldiers who carried out the daylight raid in the heart of the city were met with a hail of rocks and firebombs, and the soldiers responded with tear gas, rubber-coated bullets and live ammunition that left 42 Palestinians injured.
After taking over branches of the Cairo-Amman Bank and the Arab Bank, Israeli police and computer experts logged on to the banking networks to examine accounts and money transfers, then went to the vaults and took away about $9 million.
Two Palestinian gunmen opened fire on the Erez crossing between Israel and Gaza early today, killing at least one Israeli before being shot dead, military officials and Israeli radio reported.
The Al-Aqsa Martyrs Brigade, a militant group linked to Yasser Arafat's Fatah movement, claimed responsibility for the attack. In a phone call to The Associated Press in Gaza, Al-Aqsa identified the gunmen as Ashraf Zakout and Aymen Sahiel.
Israeli radios and a settler spokesman reported that one Israeli had been killed.
The army has closed down the Erez crossing.
"Money is one of the most important tools to enhance terror in the West Bank and Gaza Strip," an Israeli security official said after the Ramallah raid. He said the militant movement has turned from a grass-roots enterprise to a profit-making business.
"Many terror activists make a living out of perpetrating attacks," said the official, who asked to be described only as a senior security source. "They are hunting people and being paid. Today, this is the way they support their families."
The security source said that officials examined more than 400 accounts with alleged links to the militant groups Hamas, Islamic Jihad and Hezbollah, including accounts held by individuals, families and charities.
Kamal Jaballah, the operations manager at one of the two Cairo-Amman branches that was raided, described the 10 a.m. army operation as akin to a bank robbery. He said soldiers cut wires connecting security systems and covered cameras.
"They terrorized everybody, employees and customers," Jaballah said last night in a telephone interview. "They came in with guns and ordered that everybody should leave their departments and leave everything on their desks."
Saeb Erekat, a Palestinian Cabinet minister, said it was unlikely that bank accounts were being used to support militant groups. He said the raids would have a "very devastating impact on the Palestinian economy and a devastating impact on Palestinian trust in the banking system."
Israeli Defense Minister Shaul Mofaz said that the seized funds would be turned over to Palestinian humanitarian groups. Officials said the account holders could appeal the seizures to the Israeli military.
Yesterday's raids represent a new tactic by the Israeli army, which in recent months has rarely entered Ramallah.
Israeli officials said they believe that the two most recent suicide bombings in Jerusalem were supported financially by Hezbollah, a Shiite Muslim militant group that dominates southern Lebanon. Officials have long suspected that militant groups receive money from neighboring countries.
Hamas and Islamic Jihad have had offices in Syria and Iran. Under dictator Saddam Hussein, Iraq used to award families of suicide bombers $10,000 in checks drawn on the Cairo-Amman Bank.
The senior Israeli security source who briefed reporters said information on the accounts came from a variety of sources, including interrogations of suspected militant leaders and documents seized during hundreds of raids.
The official said an Islamic Jihad activist arrested in July told investigators he had received more than $4,000 for planning an attack in Netanya, and was then told by Iranian backers that "in order to get more money from Hezbollah, carry out more terror attacks."
A member of the Aqsa Martyrs Brigades was paid several thousand dollars by militant leaders in Iran to shoot a truck driver on the day that militant groups declared a cease-fire, the security official said. The attack was carried out.
The official said there was a sliding fee, similar to a bounty, depending on how many people were killed in an attack, and that some of the seized documents list equipment that the money is intended to buy, such as a Kalashnikov rifle for $2,000, bullets for about $2.50 each and explosives for $3,000.
Jaballah, the official at the Cairo-Amman Bank, said army soldiers had arrested one of the bank's computer experts the night before and brought him to the bank yesterday to help search the records.
He said soldiers kept customers and employees in the main lobby, segregated by gender. After about two hours, soldiers allowed the customers and most workers to leave but detained the tellers and account managers for the duration of the search.
"The soldiers told us that they wouldn't hurt anyone," Jaballah said. "They told us they were looking for wanted people."
He said 65 accounts from two branches of the Cairo-Amman bank were seized, along with 350 accounts from two branches of the Arab Bank.
Erekat said Israeli authorities used unnecessary force to accomplish what could have been done with a phone call. He said the United States closely monitors the banking system and that information could have been obtained without sending in the army.
"They could have called me," Erekat said.
The Associated Press contributed to this article.