TEL AVIV – The State Department is defending millions of dollars in taxpayer-funded contributions the U.S. government reportedly provided to two Palestinian universities, claiming the schools are not involved in supporting terror-related activities.

But Israeli and Palestinian security officials and Palestinian terrorist leaders themselves scoffed at the State Department claims, telling WND one of the universities is openly utilized by terror groups as recruitment grounds and military training bases.

Echoing an earlier WND exclusive article, the Washington Times reported the U.S. provided financial support to two Palestinian universities – $2.3 million to Al-Quds University in the West Bank and $140,000 to the Hamas-affiliated Islamic University in the Gaza Strip. The Times report stated both institutions have participated in the advocacy, support or glorification of terrorism.

WND had reported last month the U.S. provided funding to Al-Najah University in the northern West Bank town of Nablus, which Palestinian terrorists described as a main jihad recruiting ground.

Last week, WND reported Islamic University has a history of involvement in terrorist activity.

The funding to the universities was provided by the United States Agency for International Development. The contributions detailed by the Times to Islamic University and Al-Quds are reportedly being scrutinized by several members of Congress and their aides, who say it may violate U.S. law.

But State Department spokesman Sean McCormack said today U.S. officials concluded after a review that neither institution – the Islamic University of Gaza and Al Quds University – supports terrorist activities.

An Israeli security official took offense with McCormack’s claim with regard to Islamic University.

“It’s the height of absurdity to hear Hamas’ Islamic University is not involved in terrorism,” the official said.

Abu Abdullah, considered one of the most important operational members of Hamas’ so-called military wing, told WND Islamic University is regularly used by Hamas to support “resistance activities.”

“It is no secret that we utilize all tools at our disposal, including our fighters at Islamic University in preparations to fight the Zionists,” said Abu Abdullah of Hamas’ Izzedine al-Qassam Martyrs Brigades, Hamas’ declared “resistance” department.

Islamic University was founded by Hamas spiritual leader Ahmed Yassin, who was assassinated by Israel in 2004.

According to Israeli and Palestinian intelligence officials Islamic University’s main campus in Gaza City has been used by Hamas’ so-called military wing to recruit terrorists and suicide bombers. The officials told WND chemistry labs were used to manufacture and improve explosives for Hamas-affiliated militias.

Reuven Erlich, director of the Intelligence and Terrorism Information Center and Israel’s Center for Special Studies, told WND his organization analyzed material captured in previous Israeli raids of Islamic University, which yielded mass quantities of weaponry and Hamas incitement material supporting terrorist attacks.

Officials from Palestinian Authority President Mahmoud Abbas’ Fatah party last month claimed they captured seven Iranian military trainers – including a general of the Iranian Revolutionary Guards – inside Gaza City’s Islamic University, which they said was being utilized as a Hamas military training ground.

The Fatah officials said they also found some 1,000 Qassam rockets and equipment to manufacture the rockets inside the university. They previously suspected kidnapped Israeli soldier Gilad Shalit was being held for a time on the university grounds.

Abu Abir, spokesman of the Popular Resistance Committees, a Hamas-affilated terror group, told WND Islamic University is “extremely important” for recruitment of militants. He said several members of his group study chemistry at the university to aid in the manufacture of explosives and suicide belts. The Committees is responsible for hundreds of rocket attacks from Gaza aimed at nearby Jewish cities.

WND reported last month USAID the past two years has provided $4 million to Arkan, a Palestinian program that funds law schools at several universities in the West Bank and Gaza Strip, including Al-Najah University.

The Arkan program is entirely funded by USAID.

Israeli security officials say Al-Najah University is one of the most important recruitment grounds for West Bank terror organizations. The Israeli Defense Forces a number of times has raided the college and arrested terror suspects. At least 15 Palestinians who carried out suicide bombings the past six years attended the school.

Senior members of the Islamic Jihad and Al Aqsa Martyrs Brigades terror groups are openly enrolled at Al-Najah, WND has learned.

One senior leader of the Brigades, the declared military wing of Abbas’ Fatah party, told WND many Brigades leaders study at the university, which he described as a “recruitment center for jihad.”

The senior leader said he is currently studying sports education.

A leader of the Islamic Jihad terror organization said he is studying chemistry to enhance his terror group’s bomb-making capabilities. He said others in the chemistry department manufacture explosives for Palestinian groups.

Islamic Jihad and the Al Aqsa Martyrs Brigades has taken joint responsibility for every suicide bombing in Israel the last two years, including a bombing two weeks ago in Eilat and an attack in Tel Aviv last April that killed eight Israelis and American teenager Daniel Wultz.

According to the U.S. Foreign Operations Bill of 2006, it is illegal to fund universities which the Secretary of State “knows or has reason to believe advocates, plans, sponsors, engages in, or has engaged in, terrorist activity.”

USAID has a history of funding anti-American Palestinian projects.

WND first reported last month a northern West Bank street funded by USAID was renamed for Saddam after his execution.

Zacharias Zubeidi, leader of the Al Aqsa Martyrs Brigades in Yaabid, told WND the city changed the name on the U.S.-funded street to show “Saddam Hussein is still alive.”

“We will honor his memory until the American and Zionist occupation is driven from our land,” Zubeidi said.

WND reported USAID also reconstructed roads and municipalities in areas in the Gaza Strip controlled by Hamas.

In a WND interview, Hamas Foreign Minister Mahmoud al-Zahar thanked USAID for its efforts.

According to Palestinian Media Watch translations, after USAID funded road projects in the West Bank city of Jenin in 2004, a central street there was named after the first Iraqi suicide bomber, who killed four American soldiers in Fallujah. The mayor of Jenin reportedly participated in an anti-American dedication ceremony in which speakers blessed the “resistance of the residents of Fallujah”

Also, a USAID-funded Palestinian sports center was named after Salef Khalef, operational head of the Black September terror organization, which was behind the killing of two U.S. diplomats in Sudan in 1973 and the massacre one year earlier of 11 Israeli Olympic athletes in Munich.

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