U.S. intelligence sources estimate that the militant Palestinian group Hamas has an annual budget of $50 million, raising much of that money through its reputation as a charity. The Bush administration is taking measures to keep those dollars out of Hamas' hands.

Despite its notoriety worldwide as a terrorist group, many Palestinians see Hamas as a charitable organization that builds schools and hospitals and steps in where the Palestinian Authority has failed.

The U.S. Treasury Department's general counsel, David Aufhauser, told a congressional subcommittee Wednesday that the United States is seeking to bankrupt Hamas by undermining its reputation as a charity. "Hamas receives tens of millions of dollars a year to underwrite its political agenda," he said. "Too much of that is diverted to make bombs, and to advertise or boast of the killings."

The Bush administration has taken several steps to stop millions of dollars in U.S. funds from reaching Hamas. Along with shutting down several U.S. based Islamic charities, President Bush last month froze the assets of six senior Hamas leaders and five European-based charities accused of funneling cash to Hamas.

U.S. officials say efforts to squeeze Hamas dry of funds cannot work without international cooperation.

Assistant secretary of state for economic and business affairs, Anthony Wayne, says the United States is working intensively to bring other nations on board. "Most of the assets the terrorists use are not found in the United States," he said. "They are transiting other parts of the globe and we need that cooperation to be effective. We are finding a real responsiveness. We're finding many countries putting legislation and regulations in place to help us."

The European Union recently declared Hamas' political wing a terrorist group. The Saudi government has also taken several key steps, including seizing unregulated charitable cash boxes in mosques and department stores.

Mr. Wayne says the United States is also working with its Mideast quartet partners, Russia, the United Nations, and European Union, to address the Palestinian Authority's shortcomings in providing services to Palestinians.