Members of a newly deployed Fatah militia parade in the West Bank town of Tulkarem Sunday June 4, 2006

The deployment of a new security force in the West Bank is raising tensions between rival Palestinian factions. And with a financial crisis deepening, militant groups have issued threats against Palestinian banks. 

A 2,500-man security force, loyal to Palestinian President Mahmoud Abbas and his Fatah movement, has deployed in the West Bank town of Jenin, in a new challenge to the government led by the Islamic militant group Hamas.

Members of the so-called "Special Protection Unit" marched in the streets, carrying a picture of former Palestinian leader Yasser Arafat. About 70 of the men were armed.

Members of the new force say it is a response to Hamas' deployment of a similar unit in Gaza two weeks ago. That led to gun battles between Hamas and Fatah militiamen, raising fears of a Palestinian civil war.

Israeli analyst Gil Yaron says Fatah, which lost parliamentary elections in January, is settling accounts with Hamas.

"I think, they have reverse roles, and Fatah is openly saying it. They're saying, 'you know exactly what you did to us when we were in power, [now] we're going to do to you, so you won't have a chance to succeed,'" said Yaron.

Aggravating tensions are international sanctions that have left the Hamas government flat broke. The salaries of 165,000 government employees are three months overdue. The U.S. and Europe have offered to restore hundreds of millions of dollars in aid, if Hamas renounces violence and recognizes Israel, but the group has refused.

To alleviate the financial crisis, Palestinian banks have decided to provide interest-free loans to some 40,000 government employees. The banks had been reluctant to cooperate with the Hamas government, fearing U.S. sanctions. But the loans were announced after four armed Palestinian factions threatened to attack the banks, if salaries to government workers were not paid.