NAIROBI (IRIN)� The new twist in President George W. Bush�s terror fight is hurting average Somalians at home and abroad.

In Somalia and throughout the Diaspora, Somalians have reacted to the decision by the U.S. government on Nov. 7 to close down and seize the assets of a leading Somali-owned money transfer company.

Somalians accused the U.S. of acting with anti-Islamic bias and putting at risk the welfare of tens of thousands of Somalis.

U.S. authorities ordered the immediate closure of the Al-Barakat money transfer company and the seizure of its assets worldwide. The Bush administration accuses the company of transferring funds on behalf of the chief terror suspect Osama bin Laden and his Al-Qaeda network.

In doing so, the U.S. government claimed Nov. 7 that Al-Barakat had been formed for the specific purpose of aiding terrorists.

However, Al-Barakat�s founder and chairman, Ahmad Ali Jimale, speaking from his office in Dubai, absolutely denied any links with Mr. bin Laden or Al-Qaeda, insisting that his business was clean, and had been established for the benefit of the Somali people.

"These accusations are nothing but lies," said Mr. Jimale. "If the U.S. authorities undertake a thorough investigation ... they will find that we have nothing to do with any illegal activities."

Mr. Jimale said he formed Al-Barakat following the outbreak of civil war in Somalia in 1991 and the collapse of the country�s banking system. It is an informal banking network. It helps Somalis who had fled the country as refugees to transfer much-needed funds to relatives back home. The system operates in 40 countries.

The system remains the only way of transferring funds to Somalia. Yusuf Garad, the head of the British Broadcasting Company�s Somali service�which along with other international organizations like the United Nations use the system to pay their staff in Somalia�said the U.S. decision represented a "big setback for the Somali community."

He said even if Al-Barakat had been "misused by terrorists," it seemed unfair to close down its entire operation on which so many people depended.

"If a terrorist uses a certain phone company to arrange a terrorist attack would it be just to then close down that company?" he asked.

But whatever the impact on Somali communities overseas, it is back in Somalia itself that the impact of the action by U.S. authorities would be felt with full force. Ubaho Farah, a 63-year-old grandmother and Mogadishu resident, said she and 12 members of her extended family were living on the $150 a month one of her sons remitted to Somalia each month.

"We survive on this money, and if it stops we have no other means of survival," she said.

Yasin Khalif, a manager of Amal, another Somali-run company so far unaffected by the closures, said such transfers were the only means of income for between 70 and 80 percent of the Somali population. It is estimated that in an average year, a staggering $200 million to $500 million is transferred to Somalia through the system. By contrast, just $60 million was injected into the Somali economy last year through international humanitarian aid.

Shutting down the transfer system is the same as "condemning hundreds of thousand of Somalis to a slow death," said Mr. Khalif. The system "is the only significant economy in the whole of Somalia."

Michel Del Buono, an economist and Somalia specialist, believes that Al-Barakat has established itself as one of the cornerstones of the Somali economy. He said he believed that its closure would spell dire humanitarian consequences for a country already in the grip of severe food shortages.

"If we talk about the collateral damage of this decision, this is equivalent to killing civilians," he said.

According to U.S. media reports, U.S. authorities refused to disclose evidence which they say implicates Al-Barakat in terrorism, claiming that such evidence is classified, but said they believed that Mr. Jimale was an associate of Mr. bin Laden�s and allege that Al-Barakat�s network had moved tens of millions of dollars a year into Al-Qaeda.

In total, 62 individuals and organizations have had their assets, totalling $43 million, seized.