Hamas employs more than 1,000 people digging tunnels in the Gaza Strip, Israel Radio reported on Thursday.
According to the report, Hamas invests hundreds of thousands of dollars each month in the rebuilding and expanding of its underground network, paying each employee $300 to $400 a month.
Israeli officials were quoted as saying that rehabilitation of the terror tunnels are given priority, while thousands of homes in Gaza are still unrepaired after the fighting in 2014.
Hamas also invests heavily in smuggling building materials and excavation machinery from Egypt and Israel.
Earlier this week, Israel suspended the delivery of cement to Gaza from private suppliers for civilian reconstruction when it discovered that Hamas was diverting the material for its own purposes.
A Hamas official threatened violent retaliation if the partial ban were not lifted.