Egypt has intensified a crackdown on smuggling tunnels between its volatile Sinai desert and the Gaza Strip, a campaign which began in March.
The crackdown, which includes flooding of underground passages, was ramped up in the past two weeks before a wave of opposition-led protests in Egypt expected to start on June 30.
Egyptian President Mohamed Morsi has come under political fire at home over a strong challenge to his authority by Islamists in the Sinai who have attacked Egyptian security forces in the peninsula.
The moves against the tunnels have dashed the hopes of many Palestinians that Morsi, a member of the Muslim Brotherhood from which Hamas came, would significantly ease Egyptian border restrictions on Gaza.
“Business is clinically dead,” said Abu Bassam, who employs 40 workers in a Palestinian tunnel network in Rafah, a town on the border. “Tunnels are almost shut down completely.”
Only 50 to 70 tunnels, out of hundreds that have provided a commercial lifeline for the Gaza Strip, are still open and in partial operation, owners said. Other tunnels are used to smuggle in weapons for terrorists from Hamas and other groups.
The Egyptian army has sternly warned residents in Sinai not to approach the fence with Gaza and to stop trading through tunnels or face punishment, according to Palestinian tunnel owners who learned about the order from Egyptian counterparts.
Prices of various commodities including cement and gas have gone up substantially as a result of the Egyptian policy.