SANTA ANA, Calif., Dec. 5, 2001--The Bush administration's decision Tuesday to freeze the assets of the nation's largest Islamic charity could lead to a big drop in donations to Muslim religious organizations, Muslim officials said.

"People are frightened. They don't want to be in trouble. They don't want to take the risk," said Mostafa Al-Qazwini, imam of the Orange County (Calif.) Islamic Educational Center.

He said contributions to mosques have dipped by as much as half since the Sept. 11 terror attacks.

Other Muslim leaders are also concerned about Bush's announcement, in which he called the Holy Land Foundation for Relief and Development a fund-raiser for terrorism.

"He's sending a mixed message," said Hassam Alyoush, director for the Center of American Islamic Relations Anaheim, Calif., office. "We hear the president say this is not a war on Islam. But then, without giving reasons why, we see the largest Muslim relief organization shut down."

Holy Land has been under federal scrutiny for ties to the terrorist organization Hamas since at least 1996, court records show.

It is also the subject of a California Attorney General's office charitable-trust inquiry. Spokeswoman Hallye Jordan said the investigation will continue to determine whether the charity misused funds raised here.

Holy Land has denied any connection to terrorist groups. It has received money from just about every Muslim who gives to charity, Alyoush said, and spent millions to help clothe Palestinian widows and orphans, as well as helping victims of the Sept. 11 attacks in New York.

"It's like Goodwill or the Salvation Army," he said.

Its top-paid fund-raiser, Abdel-Jabbar Hamdan, is a Buena Park, Calif., Quranic scholar.

Tax records show that Holy Land paid Hamdan $52,000 in 1998 and $58,000 in 1999. Now, it appears Hamdan is out of a job. Also, documents show, the INS was trying to revoke his "religious worker" green card. INS officials were unsure on Tuesday whether the case was resolved.

Hamdan and his attorney didn't return calls seeking comment but in an earlier interview described himself as a religious adviser.

FBI spokeswoman Laura Bosley said the investigation is continuing. Nobody connected to Holy Land has been arrested.

Federal officials on Tuesday also blocked activities of all of Holy Land's offices, including one in San Diego.

The organization used to operate a one-man office in Anaheim, Calif., but other than Hamdan has no apparent ties to Orange County.

In a sermon at an Anaheim mosque shortly after the Sept. 11 terror attacks, Hamdan publicly condemned such terrorism, Alyoush said.

"He was outraged," he said. "He said such an act is not only a crime against innocent people but also against Islam."