Iran to fund beleaguered Hamas government

Haniyeh announced the aid in an interview published on Hamas's website at the end of a four-day visit to the Iranian capital. He then travelled to Sudan.

Western donors cut off hundreds of millions of dollars in aid to the Palestinian government after Hamas won parliamentary elections last January. The donors have demanded that Hamas renounce violence and recognise Israel's right to exist.

The government, heavily in debt, has been unable to pay the salaries to its 165,000 employees, who make up the backbone of the Palestinian government.

Despite widespread hardship in the West Bank and Gaza Strip, Hamas has refused to accept the conditions. Instead, it has turned to Iran and other Muslim countries for help.

Iran has already pledged $120m (€90.5m) to the Hamas-led government this year.

Haniyeh said the new donations would come next year. "The total amount of financial aid from Iran will reach around a quarter billion dollars," Haniyeh told the website.

The money includes $100m (€75.5m) in direct aid to the government, $45m (€34m) for workers' salaries and assistance to the families of prisoners held by Israel; $60m (€45m) for unemployed Palestinians; $20m (€15m) to rebuild houses destroyed in fighting with Israel and $15m (€11m) for libraries and cultural programmes, the website said.

Buoyed by the help from Iran, the Hamas-led government has managed to stay afloat. But the money is not enough to cover a deficit totalling hundreds of millions of dollars.

Hamas also has struggled to bring money into the Palestinian areas. International banks have refused to transfer money to the Palestinian government, fearing US anti-terrorism laws.

Palestinian Finance Ministry officials say only half of the money pledged by Iran this year has reached the government.

Much of the money has been hand-delivered to the Gaza Strip in the suitcases of Hamas officials returning from trips abroad.