Israeli PM Benjamin Netanyahu obstructs millions in Qatari payment after a skirmish wounded one Israeli soldier and killed one Hamas member, breaking an informal truce between blockaded Gaza and Israel.
Israeli Prime Minister Benjamin Netanyahu has blocked millions in Qatari aid to blockaded Gaza in response to renewed hostilities, risking increased tensions with the Palestinian territory's Hamas government during Israel's election campaign.
Weeks of relative calm in the Palestinian enclave ended on Tuesday when Israeli soldiers were fired on along the fence with Gaza in two separate incidents.
One soldier was lightly injured when a bullet hit his helmet.
In response Israeli tanks struck two Hamas positions in Gaza, killing one Hamas member, while overnight Israeli fighter jets struck what the army said was a Hamas military camp in northern Gaza.
Israel and Hamas have fought three wars since 2008 and fears of a fourth round remain.
However, violence has abated since November as a result of an informal truce between the parties.
Israel admits blocking transfer
Under that agreement Israel has permitted Gulf state Qatar, a Palestinian ally, to bring in aid to Gaza, including $15 million a month to pay salaries of Gaza's civil servants and provide aid to impoverished residents.
The January payment had been expected to enter Gaza on Wednesday or Thursday, but Netanyahu has decided to block it after the flare up, an Israeli official confirmed.
This is the first time that Israel has admitted to obstructing the transfer, which was already delayed by two weeks.
The payment would be the third of six planned tranches, totalling $90 million, in connection with the truce.
Tel Aviv's permission is required since the cash must be delivered via Israel.
So far Hamas has stuck to indirect warnings against Israel but said on Wednesday it held Israel fully responsible for any escalation.
At the funeral of the Hamas member on Wednesday, mourners called for revenge as the body was accompanied by members of Hamas' military wing.
Conditions in Gaza desperate
Israel maintains a crippling blockade of Gaza, the cramped territory wedged between Israel, Egypt and the Mediterranean.
Israel says it is necessary to isolate Hamas, but critics say it amounts to collective punishment of the enclave's two million residents.
The Qatari payments are controversial in Israel, where they have sparked opposition from right-wing activists and politicians.
In November Israeli Defence Minister Avigdor Lieberman resigned after accusing Netanyahu of being soft on Hamas following a flare-up.
The right-wing premier is now fighting a campaign ahead of April 9 elections, having long portrayed himself as "Mr Security" to Israelis.
Widely shared images of suitcases of cash being sent into Gaza through Israel could prove awkward for Netanyahu, running for a fifth term despite corruption allegations.
Right to return protests
Gaza came close to a new conflict a number of times in 2018, with Hamas-backed demonstrations along the buffer zone throughout the year.
The weekly protests have been calling for Palestinian refugees in Gaza to be able to return to their former lands and what is now Israel.
At least 244 Palestinians have been killed by Israeli troops since March, mostly during clashes near the fence but also by tank fire and air strikes.
Two Israeli soldiers have been killed.
An Israeli NGO last week said Israel killed 290 Palestinians in 2018, most of them unarmed and posed no threat.
Killings related to Israel elections?
Hamas said in a statement it "never accepts shedding the blood of the Palestinian people to fuel the Israeli elections advertising."
United Nations envoy Nickolay Mladenov warned on Tuesday that the living conditions in Gaza remained desperate and the risk of new conflict was high.
"There is no status quo; there is only a deterioration that, if left unchecked, without a vision and the political will for peace, can only lead to endless conflict and the steady rise of radicalisation on all sides," he told the UN Security Council.