The incident is a sensitive one for Egypt, particularly now when Israel is demanding a halt to Hamas smuggling into Gaza as part of truce negotiations. Israel complains that Hamas - which gets funding from Iran, Syria and donations from supporters - smuggles money and weapons through Egypt into the Gaza Strip.

Mostly the smuggling is done through tunnels at the border. But in the past - before border crossings were tightly sealed in 2007 - Hamas officials had brought in cash as well. In 2006, a senior Hamas official bragged about successfully carrying $42 million across the border.

Arab banks have generally refused to transfer money to Gaza for fear of running afoul of the United States, which considers Hamas a terrorist organisation

Hamas demands that any truce include the full opening of borders into Gaza, which Israel and Egypt have largely kept sealed since Hamas seized control of the territory from Palestinian rivals Fatah in 2007.