By Dan Williams
JERUSALEM (Reuters) - Israel accused a Spanish resident of the occupied West Bank on Thursday of being part of a network of NGOs that it suspects of diverting sums "in the eight figures" from European donations to a Palestinian faction that is on the EU's terrorism blacklist.
Juana Ruiz Rishmawi, a 62-year-old fundraiser for the Health Work Committees (HWC), a Palestinian aid group, was indicted in an Israeli military court on charges that included activity in a proscribed organisation, illicit money transfers and fraud.
Israel's Shin Bet security agency named three Palestinian HWC staffers who, it said, had with Rishmawi "duped" European donors using financial records doctored to hide cash diversions to the Popular Front for the Liberation of Palestine (PFLP).
Rishmawi's lawyer could not immediately be reached for comment. It was not clear if the three Palestinian detainees, who have yet to be indicted, had been assigned legal counsel.
Israel's Foreign Ministry urged European powers in a statement to "immediately cease funding for Palestinian organisations that work of behalf of the PFLP terrorist group".
The PFLP, which has a political as well as an armed wing and receives some funding from Palestinian President Mahmoud Abbas' umbrella Palestine Liberation Organisation (PLO), denied the Israeli allegations.
"Israel is trying to pressure the European Union into ceasing donations and aid to the Palestinian people by making such silly claims," PFLP official Mariam Abu Daqqa told Reuters.
An Israeli official said the HWC was among seven Palestinian NGOs that had diverted euro sums "in the eight figures" to the leftist PFLP, which while smaller than the dominant Palestinian factions Hamas and Fatah has carried out high-profile attacks like the 2001 assassination of an Israeli cabinet minister.
The official argued that these NGOs' humanitarian work also served to bolster the PFLP in terms of popularity and personnel and that they should be regarded as "fronts" for the faction.
Among their donors are Spain, Germany, Britain, Sweden, Netherlands, Belgium, the EU and Switzerland, the official said.
Officials in Berlin and Stockholm said the Israeli allegations were being reviewed. There was no immediate comment from the other EU countries.
Non-EU member Switzerland does not deem the PFLP proscribed but "thoroughly examines all allegations against an organisation it supports", a Swiss Foreign Ministry spokesman said.
He added that one of the seven Palestinian NGOs cited by Israel received Swiss funding and "we currently have no evidence (this) has been used for purposed other than those agreed".
(Additional reporting by Nidal al-Mughrabi, Stephanie Nebehay and Anna Ringstrom; writing by Dan Williams; editing by Mark Heinrich)