Dozens of police officers and agents from the Shin Bet intelligence agency took part in the raid early on Sunday.

Documents, computers, and a safe with hundreds of thousands of dollars were confiscated in the operation which was ordered by the defence ministry, a police official said.

Israeli security forces accuse the institution, which is run by the Israeli Arab Islamist party, of channelling funds to the Hadawa organisation in east Jerusalem, which is operated by Hamas.

The Israeli media also reported that some of the Islamic Movement's bank accounts had been frozen by the authorities.

Israel and Hamas- which took full control of the Gaza Strip after forcing out security forces loyal to Mahmoud Abbas, the Palestinian president in June 2007 - have been observing an easy truce aimed at ending rocket attacks and stopping Israeli raids.

Al-Aqsa dangers

The Al-Aqsa institution was established to defend the mosque in Jerusalem's Old City - considered the third holiest site in Islam - from nearby construction projects and other actions it views as threats to the site.

The Islamic Movement condemned Sunday's raid, saying that the "Israeli establishment went bankrupt, having no answer to the solid and strong information on the al-Aqsa institution's activities in regards to the damage caused to the holy sites in general and to the al-Aqsa Mosque in particular."

A statement from the movement accused Israel of choosing "to use the stick method instead of talking and convincing".

On Friday, tens of thousands of people attended an Islamic Movement rally in Umm al-Fahm to highlight what the group says are threats to the monument, which is built on Judaism's holiest site.

The Islamic Movement, which was founded in 1970, has two MPs in the Israeli parliament.

In August 2007, Sheikh Raed Salah, the leader of one wing of the party, was indicted for "inciting racism and violence" for calling for a "third Intifada," or uprising, to defend the mosque.

Jordanian protest

On Thursday, Jordan lodged a protest against plans to carry out excavation and construction work near the al-Aqsa mosque compound which officials in Amman say violates a 1994 peace treaty.

Mohammed Abu Hdeib, head of the lower house of parliament's committee on international affairs, told the AFP news agency that the planned work "threatens the foundations of Al-Aqsa".

He warned that this could "lead to a new violent conflict in the Middle East because Jerusalem is a red line for Muslims and Arabs".

In February last year, Israel began excavation work on a pathway leading from the Western Wall to the compound sparking Muslim outrage and prompting the UN cultural organisation to call for an immediate halt to the work. The Jerusalem mayor's office suspended work the same month.


Al Jazeera and agencies