U.S. freezes assets of groups accused of helping Hamas

Associated Press WriterWASHINGTON (AP) -- Targeting the pocketbooks of terrorists, the Bush administration froze the assets early Tuesday of an American foundation and two overseas groups accused of financing the militant Palestinian organization Hamas.

Under an order that took effect shortly after midnight, the administration froze the assets of the Holy Land Foundation for Relief and Development, an organization based in Richardson, Texas, that raised $13 million last year. The foundation, which calls itself the largest Muslim charity in the United States, denied that it was a front for Hamas.

The U.S. government planned to seize evidence later Tuesday from the Texas-based group under an order issued by Treasury Secretary Paul O'Neill, officials said. It is the third time since October that the administration has frozen assets of groups suspected of aiding terrorists.

The two financial groups targeted Tuesday, both based in Palestinian-controlled territory, are Al Aqsa International Bank and the Beit El-Mal Holdings Co., an investment group. It was unclear whether either group had assets in the United States, but the administration was urging allies to freeze the organizations' holdings.

The administration had planned the crackdown for later in the month, but moved up the action after the weekend suicide bombings in Israel that killed 26 people. The schedule change scuttled administration plans for coordinated action by its allies, officials said.

Hamas, already on the State Department terrorist list, has taken responsibility for the attacks in Israel. The Israeli government declared war on terrorism and blamed Palestinian leader Yasser Arafat for the attacks.

The administration's action reflects a willingness by President Bush to crack down on influential Muslim groups tied to terrorism, a new step in his broad campaign to use military, financial and intelligence tools to undermine terrorism.

Last month, the administration seized suspected terrorist assets in the United States linked to Islamic money exchanges operating in the United States.

A spokeswoman for the Holy Land Foundation denied that the organization had tried to help Hamas by providing assistance to the families of Palestinian suicide bombers.

"Our foundation helps people in need," Dalal Mohammed told The New York Times. "We don't do a test on whether families are in a criminal situation."

Al Aqsa International Bank was founded in 1997 with $20 million in capital, but did not begin operating until September 1999, according to administration officials. The bank is owned by the Jordanian Islamic Bank and by Beit El-Mal. Many of the same people who run Al Aqsa bank also control Beit El-Mal, officials said.

Israel outlawed Beit El-Mal in May 1998, accusing it of being tied to Hamas.