Hamas has refused an offer of financial aid from Iran in return for adopting an anti-Saudi Arabia stance in the current diplomatic stance rift between the two countries, sources from the movement have said.

The decision to reject the offer of Iranian support came from Khaled Meshal, head of Hamas’s political wing, a source told Saudi-owned news site al-Sharq al-Awsat on Friday.

The source said Meshal feared that siding with Iran against Saudi Arabia would mean Hamas risked losing its “Sunni support base”.

Long-time foes Iran and Saudi Arabia have been embroiled in a renewed row since the execution in Saudi Arabia of Sheikh Nimr al-Nimr, a prominent Shia cleric, on 2 January.

Last month Ismail Haniyeh, a senior Hamas leader, addressed a video message to the people of Iran, calling on them to support what he called a “third intifada” in Palestine.

Since October there has been an upsurge in violence in the West Bank and the Occupied Territories, with over 150 people killed on both sides.

Earlier this month, Iran pledged that it would increase financial support for Hamas and recognize it as the sole representative of the Palestinian people, in exchange for the movement expressing an explicitly anti-Saudi stance, Breitbart International reported.

However, al-Sharq al-Awsat reported on Friday that the offer had been rejected, quoting a West Bank Hamas source as saying that the movement “would never stand in any coalition against the Sunni world”.