Israel's foreign minister has threatened to expel the UN's special envoy for allegedly offering to help transfer Qatari funds to the Gaza Strip.
Avigdor Lieberman said Robert Serry, the world body's special envoy on the Middle East peace process, had first tried to convince the Palestinian Authority to transfer US$20 million from Qatar to resolve a pay crisis for Hamas employees in Gaza.
But after Palestinian president Mahmoud Abbas refused to do so, the rightwing ultra-nationalist Lieberman charged, Serry proposed UN help in making the transfer.
Serry rejected the allegations, saying the Palestinian authority had approached him "informally" on the matter.
"In considering any UN role on the issue of payments of salaries in Gaza that has potentially destabilising effects on security in Gaza, I made it clear that we would only be able to be of assistance if acceptable to all stakeholders, including Israel," he said.
Israel had been kept informed of all the discussions, he added.
Lieberman said he was seeking an "urgent meeting" about the row and reportedly would propose that Serry be declared persona non grata in Israel.
"We look upon Robert Serry's behaviour with the utmost seriousness, and strong measures will be imposed," foreign ministry spokesman Yigal Palmor said.
Prime Minister Benjamin Netanyahu's office said he had told UN Secretary General Ban Ki-moon he opposed the transfer of Qatari funds to Hamas, which he accuses of kidnapping three young Israelis in the West Bank on June 12.
On June 13, the gas-rich Gulf state of Qatar said it would help the new Palestinian unity government pay former employees of Islamist movement Hamas' disbanded Gaza government.
The pay row is the first challenge for a government formed to try to end years of Palestinian rivalry.
The dispute erupted when the Palestinian Authority's Gaza-based staff received their pay but their Hamas counterparts didn't. This prompted Hamas to demand workers from its disbanded Gaza government be taken onto the authority's payroll.
The authority, which previously refused to adjust the salaries of Hamas officials because they were named after Fatah forces were ousted from the Gaza Strip in 2007, announced the creation of a special fund to pay wages while the government discussed how to resolve the issue.
ISRAELI TEEN KILLED BY SYRIAN FIRE
An Israeli Arab teen was killed by fire from Syria that struck the Israeli-held area of the Golan Heights, the nation's first fatal spillover from more than three years of Syrian conflict, Israeli defence officials said.
Two others were wounded in the attack, including the boy's father, a civilian contractor for the defence ministry, officials said.
The deadly assault escalated tensions along the Syrian frontier at a time when Israel is clashing with West Bank militants in its search for three kidnapped teens and battling rocket squads firing at its south from the Hamas-controlled Gaza Strip.
"This is not a case of errant fire but of an intended attack," a military spokesman said.
He said Israel was retaliating for the attack with tank fire into Syria.
The shelling came after Israeli troops shot dead two Palestinians in the West Bank in clashes that erupted as they made more arrests in the hunt for the three missing teenagers.