WASHINGTON, June 28, 2002 (Reuters) —

A senior U.N. official said on Friday Israeli army restrictions in the West Bank and Gaza Strip posed a serious threat to humanitarian work with Palestinian refugees, including food distribution.

Peter Hansen, commissioner-general of the U.N. Relief and Works Agency for Palestinian refugees, was speaking after talks with Congress that he said had lifted doubts about UNRWA's role in camps that Israel calls hotbeds of terrorism.

Hansen said a month-long blockade at Gaza port had eased, but delays and restrictions in issuing permits to his agency's local staff, were hampering their work with about 865,000 registered refugees in Gaza and 618,000 in the West Bank.

''These permits are issued in very short supply. They are normally about to expire by the time they are issued and right now thay are not issuing new ones,'' Hansen told reporters. ''So we have parts of our installations where only 20 to 25 percent of staff can make it to work because they don't have a permit to get through the (Israeli) checkpoint,'' he said.

Apparently referring to reported plans by the Israeli army to tighten movement further, he added: ''We are facing a very real crisis if it's now going to become so difficult to move around in the West Bank from one town to the next.''

He said the Gaza hold-up had led to real need there.''It was the first time in a distribution that I saw people actually trampling to get their rations.''

With more than 10,000 local posts, UNRWA was the second largest employer after the Palestinian Authority in the West Bank and Gaza, where Hansen is based, according to figures before Israel's damaging military offensive this year following a deadly wave of suicide bombings against Israelis.

Some of the suicide bombers come from refugee camps, prompting criticism of UNRWA by Israel and questions about its willingness to report on illegal activities around them.

U.N. Secretary-General Kofi Annan this month wrote to Rep. Tom Lantos of California, the senior House International Relations Committee Democrat, to account for UNRWA's role after Lantos accused it of being complicit in terrorism.

Lantos was supported in his charge that the U.N. agency had failed to stop the camps becoming ''centers of terrorist activity'' by Israeli legal adviser Alan Baker, who raised similar issues with U.S. officials and members of Congress during a visit to Washington this week.

But Hansen said he was ''not so worried'' the doubts could lead to the United States cutting off aid to UNRWA, which gets between a quarter and a third of its budget from Washington.

He said Israel and the United States, knew how important UNRWA was to maintain what little stability there was in the area.

He noted Baker had said Israel supported UNRWA's work.

EMOTIONAL INCITEMENT

Hansen said he understood from his conversations with a dozen staffers from Congress that plans had been canceled to hold a hearing on the subject of his agency's role.

Hansen's agency says it reports all misuses of its facilities to headquarters and there is a misperception it runs refugee camps where the Palestinian Authority has control.

Hansen interpreted remarks by Baker that U.N. officials had indulged in ''emotional incitement'' in the camps as a counterattack for UNRWA criticism of Israel.

''I have often said that I wish that the Israelis would do what they are obliged to, to facilitate our humanitarian mission instead of putting obstacles in its way,'' he said. ''I would be very happy to tell whoever wants to listen in the press any good news about the Israelis facilitating our work. There has been precious little to share with anybody in that respect until a few weeks ago,'' he said, referring to the improvement in distribution in Gaza.

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