JERUSALEM Israeli officials said yesterday they had discovered counterfeiting equipment and stacks of bogus bank notes in the basement of the Ramallah building where Palestinian leader Yasser Arafat has been confined in his headquarters since last week.
A widespread search of Ramallah also turned up a workshop in a booby-trapped apartment, where belts for suicide bombings were being made, officials said.
They reported that 10 would-be suicide bombers have been captured or killed in recent days before they could detonate their deadly loads.
Army units searching Mr. Arafat’s compound on Sunday discovered “substantial quantities” of counterfeit currency in 50-, 100- and 200-shekel notes and the equipment to make them in the basement of the building, officials said.
“This is quite new,” said an Israeli Defense Forces official, who suggested a purely criminal enterprise would have printed dollars or euros rather than shekels. “The master plan is obviously to flood our market” with shekels, debasing the currency’s value.
Other Israeli officials, however, said it was more likely that the Palestinian Authority was desperate for cash and wanted shekels because they are the main currency in Israel and the territories.
Some speculated that the money was used to pay the families of suicide bombers and others killed in the uprising.
Soldiers searching house to house in Ramallah for evidence of terrorism also found five fully assembled belt-bombs complete with explosives and nails, according to the Israeli military.
The canvas belts, which could be detonated with a simple electrical connection, were like those used in recent weeks in suicide attacks on buses, shops and at a seaside hotel.
“We found the labs where they were being made, along with explosives and weapons,” said an official with the Israeli Defense Forces. “The belts were ready to go.”
The official said Israeli soldiers have arrested 700 Palestinians since they entered Ramallah before dawn on Friday morning.
Some of the detainees have been released, although most remain in custody.
The Palestinian Authority has been starved for cash since the intifada began nearly 18 months ago. With day laborers unable to get to Israel for work, unemployment has skyrocketed.
With no taxes and no border duties to collect, the government has been unable to pay its civil service the largest single employer with a payroll including nurses and soldiers.
