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But Hamas said it was rejecting the much-needed cash to protest Israeli delays on the delivery.

The United Nations warned that the crisis of fuel plaguing the health system in the Gaza Strip has increasingly jeopardized medical services in all 14 Gaza hospitals.

The $9.4 million in handouts came as an alternative to the $15 million in cash that Qatar was supposed to transfer to the Strip - and that was transferred two months ago, with Israel's approval - for the objective of paying Hamas salaries.

Under that deal, Israel allowed the grants to go through its territory in exchange for relative calm on the Gaza border.

Israel Prime Minister Benjamin Netanyahu speaks as he visits the Israel Aerospace Industries MLM Division plant in Be'er Yaakov near Tel Aviv.

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Last week Israel's premier temporarily blocked the funds after a flareup on the frontier.

Hamas earlier said it was refusing to accept the payments, expressing to the Qatari emir its "displeasure" at Israel's failure to deliver the payments on time.

Israel's Hayom newspaper reported that Netanyahu had proposed funds be disbursed on Fridays - the day when protests along the border are invariably most intense - to dampen violence.

"They (the authorities) have been using the Shin Bet against Jews", he said in a lecture at the defendant's seminary in a West Bank settlement, a video of which was posted on Facebook.

Half the funds would be distributed Saturday and the rest Sunday, he said, with each family receiving $100.

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"But it is better than nothing".

Palestinian medics in Gaza said a Hamas militant died and two others were wounded in the Israeli shelling of a lookout post near the fortified frontier in the central sector of the enclave ruled by the Islamist group.

Friday's protests were the first since the seeming breakdown of an informal truce agreement between Israel and Gaza's rulers Hamas.

Israel imposes a crippling blockade of Gaza which it says is necessary to isolate Hamas but which critics say amounts to collective punishment of the two million residents.

Friday's stone throwing incident near Highway 60 came a day after a Jewish-Israeli minor was formally charged with terrorist offenses in connection with a stone-throwing attack that killed a Palestinian woman in the West Bank past year.

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