Israeli authorities – the Bank of Israel and security forces – approved and facilitated the transfer of $13.5 million in cash to the Gaza Strip through the Erez crossing on Wednesday, just several hours before a Grad rocket attack on the southern city of Beersheba, Ynet has learned.

The money was transferred from a bank account of the United Nations Relief and Works Agency in the Bank of Palestine in Ramallah to the organization's account in the same bank in Gaza in order to pay the salaries of UNRWA employees in the Strip.

A similar sum was transferred in January. A source in the Gaza banking system said the money was changed by the Bank of Israel for the Palestinian bank. The central bank refused to confirm or deny the claim.

In recent years the Bank of Israel has changed money and provided other banking services to banks in Gaza and allowed the transfer of billions of dollars and shekels into the Strip, in addition to depositing billions of shekels and dollars for customers in Gaza.

Handling financial needs of 'hostile entity'?

It should be noted that the central bank's actions are not against the law, as they are done for Gaza branches of legal banks which are not based in the Strip, like the Ramallah-based Bank of Palestine or banks in Arab countries.

Nonetheless, the transfer raises a difficult question: Why does the Bank of Israel handle the financial needs of banks located within a territory which has been declared a "hostile entity"?

UNRWA told Ynet in response, "At the end of every month we transfer $13.5 million from the Bank of Palestine in Ramallah to the Bank of Palestine in Gaza. The entire sum is used to pay the salaries of UNRWA crewmembers.

"This procedure has been going on for years. It is conducted with transparency and with the knowledge, approval and full cooperation of the Israeli authorities. The Bank of Palestine is recognized by the Israeli authorities as the appropriate body for this activity. So far, this has not raised any problems in regards to our neutrality or complaints of the money being misused."