The financial crisis enveloping the Hamas government escalated today when unpaid civil servants stormed parliament demanding wages and a minister was stopped at the border carrying $20 million cash in a suitcase.

Mahmoud al-Zahar, the Palestinian Foreign Minister, was stopped crossing into Gaza by presidential guards loyal to President Mahmoud Abbas, leader of the rival Fatah party.

It was unclear whether he would be permitted to pass with the money: all sums above $2,000 must be declared and their provenance verified. Dr al-Zahar has visited Indonesia, Malaysia, Brunei, China, Pakistan, Iran and Egypt on a fundraising tour in recent weeks, although the source of the money was not confirmed.

A final decision on whether to allow the cash into the territory rests with President Abbas, who is locked in disagreement with the elected parliament over his plans for a referendum on proposals for a Palestinian state which would recognise Israel.

Even if handed over, the money would cover only a fraction of the amount owed to public workers, more than 100,000 of whom have not been paid since international aid was cut off and bank accounts frozen when Hamas took power in March.

Ill feeling over the cash crisis exploded during a parliament session in Ramallah today, when dozens of workers burst into the chamber pelting members with water bottles and forcing the Speaker to flee the building.

"We are hungry. We are hungry," the protesters screamed. "Haniyeh (the Hamas Prime Minister), go home!"

Abdel Aziz Duaik, a top Hamas official and Speaker of the house, fled the hall under heavy guard shortly before the crowd burst in. "I’m not coming back until they leave," he said as he rushed out.

During the melee, some demonstrators climbed onto desks chanting anti-government slogans. Security guards were called in to break up scuffles but no injuries were reported and calm was restored after about 45 minutes.

Most of the demonstrators were thought to be Fatah activists, whose actions were later condemned by Hamas members.

Violence and tensions have been increasing between the two factions, which have clashed over security, power-sharing and the President's proposal to accept its Jewish neighbour. Violence between Israel and the Palestinian militants has also surged.

Mr Haniyeh has agreed to a week of meetings with the President in an attempt to negotiate a way around the deadlock.

Mr Abbas, the head of Fatah, has endorsed the plan to acknowledge Israel as the only way to restart peace talks and lift the crippling international economic sanctions. Hamas, elected by a landslide in January, is fundamentally opposed to Israel's existence.

The President hopes to forge a united political front but if the talks fail, he has scheduled a referendum on the plan on July 26. There are fears that without agreement, the sporadic street violence will escalate into civil war.

Meanwhile, Hamas has said that it has raised more than $60 million from international donors but has been unable to transfer it across the border.

Last month, a Hamas official was caught as he tried to smuggle about $800,000 into Gaza. The money was seized, but later returned to the government.

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