By Dominic Casciani
BBC News Online community affairs reporter
Leading Muslims campaigning to clear the name of a British Islamic charity linked by the United States with terrorism say ministers must not accept allegations at face value.
Campaigning website: Charity says work continues
Interpal, one of the largest Islamic charities in the UK, is under investigation after US President George W Bush linked it to Hamas, the militant Palestinian organisation behind suicide bombings.
The Charity Commission has frozen Interpal's accounts - but says it can still raise money and spend it subject to approval.
The charity insists it only funds humanitarian projects in the Palestinian territories. It has also threatened to sue the Board of Deputies of British Jews over comments related to the investigation on its website.
Banned by Washington
Interpal, also known as the Palestinians Relief and Development Fund, was one of five Europe-based groups to have their assets frozen by the US Treasury Department following August's suicide bombing on a Jerusalem bus which left 20 dead.
Officials accused Interpal of being "a principal charity utilised to hide the flow of money to Hamas".
The allegation has infuriated many British Muslims and on Wednesday members of the Muslim Council of Britain met Foreign Secretary Jack Straw to complain.
Speaking after the meeting, Iqbal Sacranie, MCB general secretary, said the foreign secretary had denied being pressured by the United States into taking "precipitate" action.
"The message was that there is nothing to fear. We have to take this on board but it is the actions of the Government that will determine the reaction to this matter," said Mr Sacranie.
Mr Sacranie said he believed the charity had been subjected to a "malicious campaign" despite being investigated and cleared in 1996.
"There is a need to fight terrorism legitimately and transparently, and any allegations must be looked at, but we are concerned that the Charity Commission has been overridden."
Interpal, founded in 1994, raised some £4m in 2001. It says funds raised in the UK are distributed to partner charities in the region.
Ibrahim Hewitt, chairman of Interpal, said: "The foreign secretary said the investigation will be conducted impartially by the Charity Commission and we can only take him at his word.
CHARITIES LINKED TO HAMAS BY WASHINGTON
Commite de Bienfaisance et de Secours aux Palestiniens (CBSP), France.
Association de Secours Palestinien (ASP), Switzerland
Palestinian Association, Austria
Sanabil Association for Relief and Development, Lebanon
Source: US Treasury
"Since 1996 we have been in fairly regular contact with the commission. We've tightened up procedures.
"They met with us at our offices only last month and appeared satisfied with our audit arrangements."
Mr Hewitt insisted all the charity's partners were bona fide organisations and it was seeking permission this week to transfer a further £250,000 to Palestinian projects.
"As a charity we must stay out of politics but we keep seeing ourselves being sucked into political situations," said Mr Hewitt.
Neville Nagler, director general of the Board of Deputies, confirmed it had received a letter from Interpal's solicitors regarding allegations on its website.
"The matter is in the hands of our lawyers," Mr Nagler told the BBC. "When the matter was drawn to our attention, we removed the reference to Interpal from the website and have sought advice from our solicitors."
Commenting on Wednesday's meeting, a Foreign Office spokesman said: "Interpal was discussed and all I can say is that there are proper legal procedures in place and those legal procedures will be followed."