A security official at the crossing said Mahmoud Zahar had six pieces of luggage with him. It was not known which ones held the currency or what denominations it was in.

The border is staffed by members of the Palestinian presidential guard, who are observed by European monitors. The monitors stand alongside the border guards and look at video and X-ray equipment, reporting any suspected violations to Palestinian or Israeli authorities.

Mohammed Dahlan, an influential Fatah member, said: "We hope this money finds its way to the finance ministry and not the treasury of Hamas."

Earlier, dozens of civil servants burst into the parliament building in the West Bank to demand their long-overdue salaries, throwing water bottles at Hamas politicians and forcing the parliament speaker to flee.

Last month, a Hamas official was caught smuggling $800,000 into Gaza. The money was seized but later transferred to the government.

But since Zahar is a VIP, there were no restrictions on him bringing in the cash, officials said. Zahar returned home and did not speak to reporters.

Hamas claims it has raised more than $60 million from Muslim and Arab countries. But US pressure on international banks has prevented them from transferring the money into the Palestinian territories.