By Matthew Kalman
Israel told America it hoped to push the Gaza Strip to the 'brink of collapse', leaked diplomatic cables reveal.
Hamas, which won a parliamentary election in 2006, seized control of the narrow coastal strip in 2007 in an armed coup, leading both Egypt and Israel to seal their borders with the territory and impose a crippling economic blockade.
The resistance group is shunned by the international community for its refusal to recognise Israel, renounce violence or accepting existing Israeli-Palestinian peace deals.
Protest: Leaked diplomatic cables have revealed the blockade imposed by Israel on the Gaza Strip was designed to bring it to the 'edge of financial collapse'
Diplomatic cables released by the WikiLeaks site reveal that Israeli policy was designed to cripple Hamas, stop daily rocket fire at the south of the country and secure the release of kidnapped soldier Gilad Shalit, who remains in captivity more than four years after his abduction.
One cable, dated November 3, 2008, was issued seven weeks before Israel launched an attack on the territory that left more than 1,000 dead and thousands more homeless.
It said: 'As part of their overall embargo against Gaza, Israeli officials have confirmed to (U.S. embassy economic officers) on multiple occasions that they intend to keep the Gazan economy on the brink of collapse without quite pushing it over the edge.'
It added that Israel wanted the territory's economy 'functioning at the lowest level possible consistent with avoiding a humanitarian crisis'.
Tough: A Palestinian man inspects damaged to a smuggling tunnel on Rafah, Gaza, after an Israeli air strike last night
Shunned: Israel launched an attack on Hamas in Gaza in December 2008 and has kept up tight economic sanctions in a bid to clampdown on the group
Israel allowed basic foodstuffs and medicines into the territory, but humanitarian groups said the policy pushed thousands of people below the poverty line and left them depended on UN handouts.
U.S. diplomats reported that Israel's designation of Gaza as a 'hostile entity' had led to a clampdown on economic cooperation, including the transfer of banknotes in shekels - the official currency in both Israel and Palestinian activities.
The cable added: 'Decisions on shekels in circulation in Gaza and the territory's economy in general are treated by the government of Israel as security matters.
Captured: The cables, released by WikiLeaks, also reveal Israel wanted to secure the release of soldier Gilad Shalit being held by Hamas
'The National Security Council (NSC) abides by the principal that Gaza should receive just enough money for the basic needs of the population, but is not interested in returning the Gazan economy to a state of normal commerce and business.
'The agency... will not permit any large scale transfer of assets from Ramallah-based banks to their branches in Gaza for fear of improving the purchasing power of entities wishing to harm Israel.'
A subsequent cable, dated December 4, 2008, reported a phone conversation between the U.S. Embassy economic affairs officer and Udi Levi - Counterterrorism Finance Bureau Director at the NSC - which the American used 'to press for release of 250million shekels to the Gaza banking system'.
It added: 'Mr Levi said continued rocket and mortar attacks from Gaza, stalemate in negotiations on release of Hamas-held Israeli Defence Force soldier Gilad Shalit, and new information on Hamas access to the Palestinian Authority salary payments funded by the requested transfer all made it unlikely that the GOI would honour the request.'
Mr Levi said banks in Gaza were being forced by Hamas to pretend they had a liquidity crisis in order to pressurise Israel into allowing more cash into the territory.
'He offered to share all GOI information on the topic in a meeting with relevant U.S. government officials at their earliest convenience.
'We will take him up on that offer and report,' the cable added.