Hasan Khraisha on Saturday said the probe would look into suspicions that some Palestinian Authority officials and ministers have allowed Palestinian companies to make millions of dollars by selling 420,000 tonnes of cement to Israeli firms at high profit.
Khraisha, who says he received death threats to scare him off the case, said: "The attorney general has started investigating the file we submitted on selling cement to Israelis that goes into building the wall.
A parliamentary committee found in June at least four Palestinian companies had sold cement imported from Egypt to Israeli firms constructing homes in Jewish settlements built on West Bank land Israel occupied in the 1967 Middle East war.
Other inquiries found the imported cement was also used to build the barrier.
The investigation was ordered by Palestinian President Yasir Arafat in recent days at a time when he has come under increasing pressure from his Fatah movement, and internationally, to implement administrative reform and crack down on corruption.
"The profits went into their pockets, not the budget"
Palestinian Authority attorney general
Khraisha said they had videotaped evidence of such activities. "The Palestinian companies bought the cement for $22 (per tonne) and sold it to Israeli firms for $100. The profits went into their pockets, not the budget," Khraisha added.
The inquiry had no proof the cement was used to build the barrier, but had uncovered "a report sent to Arafat dated 11 September 2003, from the Palestinian Authority's auditor Jarrar al-Qidwah which said the cement was used for building the
wall," Khraisha said.
Of the threats to his life he said: "The threats from these people, these gangs, will not scare me. I will pursue my work to defend the cause of my people who are killed during protests against the wall," he said.
Israel has built about a third of a planned 600km barrier, much of which zigzags through the West Bank.