JERUSALEM: Israel has agreed to allow the transfer of $12 million into the Hamas-ruled Gaza Strip, an Israeli official said yesterday.

The cash transfer, approved by Prime Minister Benjamin Netanyahu after meeting Middle East peace envoy Tony Blair, would be a quarter of the amount Palestinian President Mahmoud Abbas' government said it needed to pay salaries.

The Israeli official, speaking on condition of anonymity, gave no other details about the transfer which will be between bank branches in the West Bank, controlled by Abbas' Fatah, to bank branches in the Gaza Strip.