Israeli officials said Hamas cells in the Jerusalem area and the West Bank continued to receive funding from Saudi Arabia via Syria in wake of the Hamas takeover of the Gaza Strip. They said the funding has been used to recruit operatives, support families of detained Hamas members and construct buildings throughout the area.

"The money has been used to revive Hamas in the West Bank," an official said. "They now have a very active infrastructure."

The Israel Security Agency has concluded an investigation that determined that Hamas received more than $250,000 from abroad for the Jerusalem network since January 2006. A statement by the office of Prime Minister Ehud Olmert said the money was channeled through a Saudi organization entitled "Union of Good."

"During the investigation, evidence was uncovered that indicated intensive Hamas activity in Jerusalem, especially the Temple Mount, financed by Hamas elements abroad," the statement said. "The Hamas headquarters abroad transferred funds to the Union of Good, which then used money changers, bank accounts in Judea and Samaria [West Bank], and couriers to send the money to a local charity organization which then transferred cash to the Hamas headquarters in Jerusalem.

The Saudi organization, chaired by Sheik Yusef Al Qaradawi, was deemed the main financier of Hamas in the West Bank. Officials said the Saudi funds were sent to Hamas headquarters in Damascus, and from there relayed to the West Bank.

The statement said the Saudi funding was meant to pay for Hamas activities in Jerusalem coordinated with the Islamic movement in Israel. The activities focused on the Islamic fast month of Ramadan during which Hamas sought to recruit Palestinians as well as complete construction on Jerusalem's Temple Mount, the site of the Al Aqsa mosque.

Officials identified the head of the Hamas network in Jerusalem as Amin Rushdi Shviki, 47. Shviki, the owner of a glass factory, was said to have initiated contact with the Saudis and sent an emissary abroad to organize the transfer of funds.

Others in the network were identified as Nasser Yaacoub Abu Saud, Khalil Attiya Gizawi and Mahmoud Radwan Farah. Farah, chairman of a Hamas charity, was said to have directed funds to Hamas leaders in Jerusalem.

"The arrest of Hamas's Jerusalem leadership significantly harmed the organization's activities in the city and its attempts to strengthen itself and gain influence in Jerusalem and on the Temple Mount," the government statement said. "In addition to exposing the channels for funds transfers, the operation has had a major demoralizing effect on Hamas's Jerusalem infrastructure, especially on those members with Israeli ID cards, who had felt secure in their operations in the city."