RAFAH BORDER TERMINAL, Gaza Strip (AP) – A Palestinian customs inspector carried an armload of cigarette cartons he had just seized from a Palestinian traveler at the Gaza-Egypt border, and dropped them in a room for confiscated goods.

For European monitors stationed at the border’s Rafah terminal, such scenes are proof that the Palestinian-controlled crossing, Gaza’s only gateway to the world, is operating properly. They say contraband is caught in meticulous checks – though they acknowledge they can’t stop the flow of cash to the Hamas-led government.

Israel insists that not just cash, but weapons and suspected Palestinian militants are slipping through the border. It cites such breaches as the main reason it has kept Rafah closed four-fifths of the time in the past nine months.

Palestinian officials dismiss Israel’s security claims, saying the closures are meant to exert pressure to try to win the release of an Israeli soldier kidnapped by Hamas-allied militants in Gaza last June. The officials say that those trying to smuggle weapons and militants use tunnels under the border, not the terminal.

The frequent closures have created a backlog of travelers and led to chaotic scenes at Rafah. Israel only gives word the night before whether it will permit the border to open. When the announcement comes, crowds rush toward the terminal compound and spend the night outside the main gate to be among the first in line.

On Friday morning, as the border opened, hundreds pushed and shoved to get on terminal buses. For many, it was the latest of several attempts to get across. Club-wielding Palestinian guards tried to control the crowd, occasionally firing in the air. In a similar scene Thursday, seven people were injured, including two by bullets.

In Friday’s mayhem, a few tried a shortcut, pleading with guards standing behind a coil of barbed wire to let them through a side road. One man waved an X-ray to make his case for special treatment, another pointed to a blind son.

The Palestinians took control of Rafah in a U.S.-brokered agreement on Gaza crossings, reached after Israel’s pullout from the coastal strip in September 2005.

Under the deal, the European observers were deployed to watch the Palestinian inspectors and make sure no militants or weapons are smuggled through. At a liaison office a few miles away, Israeli, Palestinian and European inspectors also monitor the crossing via real-time TV and data feeds.

Israel initially complained there was a delay in the data flow, but those problems have since been worked out, said Jose Vericat, a spokesman for the observers. Israel can ask that any passenger to be held for up to six hours for a further check, but has never done so, Vericat said during a terminal tour.

Asked by the Israeli human rights group Gisha to explain the frequent Rafah closures, the Defense Ministry said the crossing is “a passageway for those instigating terror in the Gaza Strip.”

Others move through the crossing to reach the Egyptian Sinai Peninsula and from there sneak into Israel to carry out attacks, the ministry said. In January, a Palestinian from Gaza blew himself up in the southern Israeli town of Eilat, killing three Israelis. However, Palestinian security officials said at the time the suicide bomber had not left Gaza through a crossing.

The Israeli Defense Ministry statement did not explain how suspected militants would be able to cross with Israel watching so closely. Earlier this week, Israel’s Shin Bet security service chief, Yuval Diskin, said dozens of Hamas operatives went to Iran for training, but did not say how they might have gotten across the border.

Israeli Foreign Ministry spokesman Mark Regev reiterated Friday that militant and weapons have been slipping through but declined to elaborate.

The Defense Ministry also said Rafah is “exploited by terror elements for transferring knowledge and technology that enable terrorists” to fire rockets at Israeli border communities.

However, European monitors said it’s virtually impossible to sneak weapons or explosives through.

The luggage of passengers from Egypt is checked twice, first with a scanner that detects metal and chemical substances, and then manually.

The most popular contraband is cigarettes, with between 3,000 and 5,000 cartons seized every day, said a German customs inspector. Only two cartons are allowed per person, but with cigarettes costing 10 times as much in Gaza as in Egypt, the temptation is overpowering.

The inspector said travelers also smuggle prescription drugs, car parts, canned foods, even fish. He said he has seized the occasional sniper scope or pack of bullets that were quickly detected by the scanner.

“The chance of getting weapons parts through here is very slight,” he said. He spoke on condition of anonymity because he was not authorized to talk to the media.

Another thorny issue is the cash brought in by Hamas officials – $68 million in 2006, according to Palestinian Finance Minister Samir Abu Eisha of Hamas.

The money, given by Iran and several Arab countries, was carried in suitcases because Arab banks refused to transfer it, for fear of running afoul of U.S. anti-terror laws. The money has helped keep afloat the Hamas government, target of a year-long international boycott.

The Egyptians say they don’t have the legal means to seize the funds and the Europeans can’t do more than observe. Palestinian President Mahmoud Abbas says he’ll let the money through as long as it’s sent to the Treasury.

Regev said Hamas has used the cash to beef up what he called its “terrorist infrastructure.” Last year, Hamas established a 5,600-strong militia. It also runs a small weapons industry, building rockets, mines and grenades.

At the Rafah crossing, Palestinian travelers were caught in the middle.

“We were treated like animals,” said Ramadan Shaer, 47, who finally left his native Gaza on Friday after four attempts, including nights on the street. As he stood in line at passport control, Shaer, who was en route back to his home in Sweden, said he would never return to Gaza.