A Palestinian bank has frozen the accounts of Hamas' security force after mistakenly paying the wages of 3,000 of the group's members, officials say.

The Gaza branch of the Palestine Islamic Bank says it acted at the request of the Palestinian Authority.

A spokesman for Hamas Islamist group described the move as illegal.

Tensions between Hamas and its rivals from Palestinian leader Mahmoud Abbas' Fatah faction have been high since Hamas seized control of Gaza in June.

The Palestine Islamic Bank on Monday froze the accounts of at least 3,400 members of Hamas' Executive Force.

Hamas immediately denounced the move.

Hamas spokesman Ehab al-Ghsain said that "legal procedures could be taken against the bank in the coming hours," Reuters news agency reported.

The group also held the bank's manager for questioning.

Some 3,000 members Hamas' main force were paid the salaries earlier this month before the mistake was noticed.

The payments were halted and most were reversed, Fatah officials said.

But hundreds of Hamas men reportedly were able to cash their salary cheques.

Israeli Prime Minister Ehud Olmert says prospects for peace could be boosted by the creation of a new Palestinian government without the Hamas party.

Israel would regard such a cabinet as a partner, he said, adding that Hamas' exclusion "creates opportunities".

Palestinian Authority President Mahmoud Abbas is to swear in a new cabinet after his Fatah party's violent split with the Islamist Hamas movement.

The US says it will lift an aid embargo once the new cabinet takes over.

The US consul-general in Jerusalem, Jacob Walles, said there were no obstacles to re-engaging with the new government, which would have full US support.

On Saturday night, Mr Abbas issued an emergency decree allowing him to swear in a new cabinet without the approval of parliament, in which Hamas has a majority.

Finance Minister Salam Fayyad is set to become the new prime minister. The presidential decree also enables his government to bypass parliament when they make decisions.

Mr Abbas sacked the Hamas Prime Minister, Ismail Haniya, on Thursday after factional fighting left more than 100 people dead in Gaza.

Shortly afterwards, the Hamas movement said it had taken over full control of Gaza, as its gunmen ransacked Fatah offices and arrested or executed its fighters.

The two parties briefly shared power in a fragile coalition formed after Hamas won a landslide victory in elections last January.

But the foreign aid that is a lifeline for Palestinian people and institutions was curtailed over Hamas's refusal to renounce violence and recognise Israel.

Hamas criticism

Mr Olmert said on Saturday that the planned formation of a new government could boost chances for peace and could be "advantageous" for the Palestinians.

Recent changes had made the situation "clearer", he said.

The new cabinet, he said, "presents an opportunity that has not existed for a long time".

"A Palestinian government which is not a Hamas government is a partner and we will co-operate with it."

Mr Olmert was speaking before boarding a flight to the US for talks.

Mr Abbas is expected to swear in the emergency government on Sunday at 1300 local time (1000 GMT).

Hamas has denounced the move to form an emergency administration as illegal.

Fleeing Gaza

On Saturday, violence between the rival factions spread from Gaza to the West Bank, where Fatah remains dominant.

Second deputy speaker Hassan Khuraishah, an independent, told the BBC he had been beaten up as he tried to prevent Fatah gunmen from raising their flag.

In a show of strength, Fatah supporters paraded around Ramallah, firing weapons into the air and chanting "Hamas out".

Almost all Hamas politicians and prominent supporters in Ramallah have either fled or gone into hiding.

Fatah supporters also took over the Hamas-controlled legislative council in Nablus.

Meanwhile, hundreds of Fatah supporters are reported to have been fleeing Hamas-controlled Gaza by land and sea.

Gaza, and the much larger West Bank, are just 45km (30 miles) apart, but correspondents say they now look poised to function as two separate territories.

Israeli and Palestinian peace activists have been holding protests to mark 40 years since the 1967 Arab-Israeli war.

Protests were taking place in the West Bank and Tel Aviv, but Israeli police prevented a Palestinian conference on the anniversary in Jerusalem.

Palestinian President Mahmoud Abbas said creating a Palestinian state would wipe out the memory of the Arab defeat.

The Six-Day War changed the map of the Middle East, establishing Israel as the region's dominant military force.

Air strikes

Before the war, the 19-year-old Jewish state had been awash with fear, as Arab armies massed on its borders.

UN peacekeepers had been expelled from the Sinai, and Egypt had closed the Red Sea to Israeli shipping.

In an extraordinary showdown on the eve of war, Israeli generals swore and shouted at the prime minister that Israel had to strike first to be sure of victory.

The conflict began with air strikes that destroyed much of Egypt's air power on the ground.

By the end of the fighting, Israel had defeated the armies of Egypt, Jordan and Syria.

It captured territory three times the size of the country as it was on 4 June.

The Golan Heights and Palestinian territory in the West Bank, Gaza and East Jerusalem remain under its control to this day.

Conference banned

The Israeli government marked the anniversary with Jerusalem Day celebrations last month, in accordance with the Hebrew calendar.

The memory of [defeat] we hope will be erased by ending the occupation and by establishing our independent state Mahmoud Abbas

Israel has arranged no other official ceremonies for the anniversary and BBC correspondents in Jerusalem say there is a reflective mood and no fanfare.

Several hundred Palestinian activists held a rally in Ramallah in the West Bank, while more protesters marched to the Hawara checkpoint near Nablus - a key local symbol of the Israeli occupation.

In Hebron, about 250 activists of the Israeli anti-settlement group, Peace Now, marched while shouting: "End, end the occupation!"

But Israel banned a Palestinian conference due to be held in East Jerusalem.

Police deployed around the hotel hosting the conference, entitled "Jerusalem, the capital of the Palestinian state, how to transform slogans into reality", notifying the organisers of the ban.

More events will be held throughout the week, culminating in anti-occupation protests around the world on Saturday.

In an address to mark the anniversary, Mr Abbas remembered the "massive defeat" for the Arabs.

But he also said: "Despite all the difficulties our revolt was equal to this defeat, the memory of which we hope will be erased by ending the occupation of Arab and Palestinian territory and by establishing our independent state."

However, he also warned that recent infighting among Palestinians had left them "on the verge of a civil war".

In Egypt there are no official events to mark the anniversary or the sacrifice of those who died - just the occasional newspaper article recalling what happened.

The Israeli authorities are planning to build three new Jewish neighbourhoods in East Jerusalem, an area regarded as occupied land under international law. The plan, which has yet to receive final approval, would involve building about 20,000 homes.

The Palestinian chief negotiator, Saeb Erekat, said the plan destroyed efforts to re-start the peace process.

He said Israel had to choose between settlements or peace, but could not have both.

Yehoshua Pollak, Jerusalem's deputy mayor, said the intention was to create a contiguous Jewish residential area linking East Jerusalem with major West Bank settlement blocs.

Israel has occupied East Jerusalem since 1967. It annexed the area in 1981 and sees it as its exclusive domain.

This has not been recognised by the international community. Palestinians hope to establish the capital of their future state in the East Jerusalem.