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Israel says slain journalist was a Hamas spy, but U.S. had just approved a grant for his company.

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Israel’s defense minister said Tuesday that a Palestinian journalist who was shot dead by Israeli troops on the Israeli-Gaza border was a Hamas operative, although the media production company he founded had recently been vetted for a U.S. government grant.

Yaser Murtaja, the co-founder of Ain Media, was shot as he filmed protests at the border fence on Friday.

Defense Minister Avigdor Liberman said that Murtaja, who used drones to film in the course of his work, was giving drone footage of Israeli positions to Hamas, was the equivalent of a captain in the group’s military wing and had been on its payroll since 2011. He did not provide evidence for the assertions.

A ministry spokesman, asked for evidence, said Liberman’s words “speak for themselves.”

The Israeli military and the Defense Ministry did not respond to requests for comment Tuesday on whether Murtaja was directly targeted.

Murtaja had worked as a cameraman on a documentary by the Chinese artist Ai Weiwei and had filmed others for outlets such as Al Jazeera. His family strongly disputed Israel’s allegations. “His use of the drone was to show that Gaza has a beautiful and vibrant face,” said his 24-year-old brother, Mutasim.

Murtaja’s Gaza-based company had also recently been screened in accord with strict U.S. government requirements as part of an application for assistance from USAID, said a State Department official who spoke on the condition of anonymity in line with protocol. The grant had been approved, the official said, raising questions about how an affiliation with Hamas’ military wing would not have been flagged if Murtaja was known to Israeli intelligence.

The border demonstrations have fueled a fierce propaganda battle between the Israeli government and Hamas, the militant group that controls Gaza and is classified by both Israel and the United States as a terrorist organization.

Israel has said that Hamas is attempting to use the cloak of peaceful protests to launch terrorist attacks, pointing to incidents of violence along the border, including what it describes as attempts to plant explosives and one shooting incident. It says it has no choice but to use live ammunition against violent “rioters.”

Hamas, meanwhile, has evoked Martin Luther King Jr. in its public statements as it gives full backing to the demonstrations in the blockaded enclave, which have drawn tens of thousands of Palestinians. Hamas leader Ismail Haniyeh described a “battle for awareness” as he attended Murtaja’s funeral Friday.

Many of the demonstrators, however, have said they are simply demanding what they say is their U.N.-supported right of return to areas now in Israel.

The State Department official said she could not provide further details on the vetting process for USAID grants or say whether recipients would be checked against Israeli blacklists. She said that a letter of agreement for an $11,700 grant for equipment and technical assistance had been signed with Ain Media but was in its “early stages.”

“They are a beneficiary because we have signed this agreement, but the grant has not been delivered,” she said. Rushdi Farraj, Murtaja’s business partner, said the grant was awarded to establish a graphics department under USAID’s “Compete” project, which helps develop the Palestinian private sector.

When Murtaja was shot Friday, he was wearing a vest clearly marked “PRESS.” He was one of about 400 people injured by live ammunition, according to the Gaza Health Ministry.

Liberman had said earlier that anyone using a drone near Israeli troops was putting themselves in danger. Journalists with Murtaja the day he was shot said he was filming with a steady cam.

A Hamas statement said Liberman’s comments were contrary to the “facts on the ground” given that Murtaja was not filming with a drone Friday. The statement did not address the allegation that Murtaja was on the group’s payroll.

Murtaja was one of six journalists the Palestinian Journalists Syndicate said were shot Friday. The syndicate identified one of them as working for Hamas television.