Gaza 'faces crisis' over closure of crossing into Israel

The UN has warned international donor countries that Gaza is threatened with mounting and serious economic and humanitarian problems because of the fortnight-long closure of the key Karni crossing into Israel. Perishable Palestinian exports worth $500,000 (£280,000) a day and badly needed medical and humanitarian supplies are being held up at the Gaza border because of the closure of Karni cargo crossing since 15 January.

The warning comes at a highly sensitive time because of the separate international threat to funding of the Palestinian Authority after Hamas's election victory and a decision by Israel to freeze remission of $2m of customs duties this month for the same reason. Israel confirmed it would not pay this month's duties collected on the Palestinians' behalf due yesterday while it considered its longer term options in the wake of Hamas's victory.

The Palestinians dispute Israel's stated security reasons for closing the Karni crossing and say it violates the post-disengagement agreement brokered by the US Secretary of State, Condoleezza Rice in November, which said Israel would "permit the export of all agricultural products from the Gaza Strip during this 2005 harvest season".

The UN has told donors that more than 100 tons of strawberries, cherry tomatoes, peppers, cucumbers and flowers ­ including produce from nurseries in the former Israeli settlements saved by an international rescue package put together by former World Bank boss James Wolfensohn ­ are " soiling, or have been destroyed or donated locally to hospitals".

The UN's Office for the Co-ordination of Humanitarian Affairs says that the serious "economic and humanitarian concerns" raised by the closure have been compounded by a halt to the import of urgently needed medical supplies including anaesthetic drugs, which it says are "in particularly short supply". According to the UN office, the closure is creating a shortage of dairy products, fruit and construction materials, which are waiting on the Israeli side of the crossing because of the closure. Gaza residents are also reporting shortages of baby milk and sugar as a result of the closure.

While some of the produce has been dumped at knock-down prices on the internal market serving Gaza, the UN has warned donors that the market in the Gaza Strip "cannot absorb" the produce destined for export.

Israel has also separately warned that if Hamas takes control of the Palestinian Authority, the future of the agreement brokered by Ms Rice and designed to increase access of goods between Gaza and the outside world could be in doubt.

The Palestine Trade Centre (Paltrade), estimates that 80 daily truckloads have not been able to leave since the closure at Karni crossing was imposed and that the total loss of exports is estimated to be worth up to $7m for the entire month. The UN's report also says Israeli textile companies have raised concern about more than £6m in seasonal clothing merchandise contracted out to 20 Gaza sewing factories which has also been prevented from reaching Israeli retailers because of the closure.

At the behest of the Israelis, who told the PA that it had fully credible intelligence reports of an attack on the crossing, the Palestinians started a trench-digging operation on 5 January which after two weeks uncovered what the Israelis said was a tunnel designed to further such an attack. Palestinian officials described it as a "small hole." Two further trench-digging operations carried out by the Palestinians have not revealed any more tunnel workings. Mark Regev, the Israeli Foreign Ministry spokesman, said that Israel had shared with the Palestinians ­ and with the international community ­ "concrete reports" of a " large-scale terror attack," and had also offered to ship the goods through the Kerem Shalom crossing point at the joint border with Israel, Egypt and Gaza but that the Palestinians had refused the offer.

Palestinian officials said yesterday that while they were ready to see goods pass through Kerem Shalom as well as Karni, it did not have adequate capacity and they feared the offer was a "political" move which could result in the long-term substitution of the Kerem Shalom crossing for Karni.

Karni, which is due to receive hi-tech scanning equipment to speed up shipment of goods which have been subject to long security delays, was designated as the main crossing point for goods into Israel under the rice agreement. According to Palestinian officials, a US mediator who monitored the PA trench-digging operation had accepted their contention that evidence of tunnelling by militants could not be found. Mr Regev stressed that the continued closure of Karni ­ which predates last week's Palestinian Legislative Council elections ­ was in no way "punitive" and was unrelated to concerns about a Hamas takeover of the PA. But he said that the Rice agreement had been predicated on the assumption that it would advance progress towards a return to the internationally agreed road map for peace negotiations. That situation could change "if one of the parties no longer agreed to the road map."

The Egyptian intelligence chief Omar Suleiman claimed that Mahmoud Abbas, the Palestinian President, had said that he would not allow Hamas to form a government unless it recognised Israel and renounced violence. That was dismissed by a senior figure in the outgoing Palestinian administration as a "misquotation". Ishmael Haniya, the leading Hamas parliamentary candidate, told Haaretz that the faction opposed plans by Mr Abbas to take full personal control of the security services.

Doctors inserted a feeding tube into the stomach of Ariel Sharon, yesterday. Mr Sharon has been in a coma since suffering a massive stroke last month.