Prices soar as Gaza smuggling booms; officials, soldiers and middlemen are accused of cashing in

CAIRO: Palestinians face inflated rates for groceries and batteries, hospitals have turned to smugglers for medicine and equipment, Israeli soldiers and other middlemen are accused of pocketing millions of dollars, and the Hamas-led administration takes a cut as the smuggling of goods.

Key points

• And other humanitarian groups bringing in aid, Israel has given 12 traders in Gaza permits to import commercial goods, according to Gaza's Economy Ministry.
• Since late 2025, Israeli authorities have broken up a number of alleged smuggling rings, indicting more than a dozen residents, including reserve soldiers operating in Gaza.
• In court documents, Israeli prosecutors pointed to one mysterious smuggler known only as Abu Bassel who they remarked has "numerous connections within the Israel Police."
• As a cover, the Israeli court documents additionally have no details concerning Abu Bassel's identity but noted he uses an aid organization, Al-Mughtarib Al-Falastini.
• They estimated up to $100 million had been collected on smuggled goods since the ceasefire.

Cigarettes and tobacco – banned from entry to Gaza since the start of the Israel-Hamas war in October 2023 – rake in the biggest profits for smugglers and merchants, authorities and residents say. But everything from iPhones and solar panels to fuel and anesthetics are additionally brought into the tiny coastal territory illegally. Israel restricts quantities of some goods and bans others outright. It defines plenty of as "dual use" – including concrete, vehicle parts and X-ray machines – asserting they could be repurposed by Hamas militants for military functions.

To build a picture of the illicit trade, The Associated Press analyzed Israeli court documents and spoke to five major traders who import smuggled goods, three merchants who sell them, and two truckers – all on condition of anonymity since of their roles in the illegal smuggling business and worries regarding their safety in Gaza. AP additionally interviewed four Palestinian office-holders, two on condition of anonymity since of worries concerning retribution from Israel, Hamas or merchants; two U.N. Authorities, on condition of anonymity over concern for their jobs; and a dozen Palestinian residents. This person spoke concerning how they obtain everyday items and their skyrocketing costs.

AP discovered a rush from all sides to profit off the tight restrictions imposed by Israel on Gaza and its 2 million residents, most of whom have been displaced by the war. Smuggling rings – which have long flourished, circumventing two decades of Israeli blockades and building a network of businessmen and collaborators – pull in millions of dollars. Payoffs go to Israeli troops, drivers, warehouse workers and others on both sides of the border, according to traders and court documents.

"The occupation has left no other option before us. Smuggling has become routine, " one trader remarked, noting that some in Israel's military are willing to assist – for a cost. "We benefit, they benefit and the people in Gaza benefit because we provide goods, including food, to the market."

For context, the Israeli military remarked via email that it takes the problem of smuggling "very seriously and works to prevent it." It noted any cases of suspected involvement by Israeli military personnel are "examined and handled in accordance with the law." But military office-holders did not answer a list of detailed questions from AP on the roles of soldiers or Gaza's administration in smuggling.

Gaza's Hamas-led administration additionally takes in some of the profit, according to merchants and one Palestinian official. Merchants call it "taxing" – on both smuggled goods and those brought in legally.

Mohammad Barbakh, of the Palestinian Economy Ministry in Gaza, informed AP the administration receives up to 20% of the cost of any smuggled goods if the merchant reports them to authorities, and that increases to 80% if the items go unreported and authorities discover them. But he remarked authorities don't refer to their cut as "taxes" and that they haven't taxed goods entering legally since the war's start. How smuggled goods flow into Gaza.

Since the war began, Israel has tightly controlled all entry of food, aid and goods into the Gaza Strip, including a total aid blockade that shut off entry entirely for almost three months last year, pushing parts of the territory into famine. The flow of goods has rose since a fragile ceasefire agreement went into effect in October but remains well below prewar levels.

Besides the U.N. And other humanitarian groups bringing in aid, Israel has given 12 traders in Gaza permits to import commercial goods, according to Gaza's Economy Ministry. Contents of shipments must be approved by Israeli authorities, a process aid workers and merchants say can be long and opaque, sometimes ending with a rejection on grounds of "dual use."

Notably, the military classifies a list of some 150 broad categories of items as "dual use, " including concrete, asphalt, steel pipes and wooden planks, according to documents provided by COGAT, the military department in charge of coordinating entry of goods into Gaza. In an official note to AP, COGAT remarked it has let in some "dual use" items including generators and X-ray machines, in specific cases under strict monitoring.

Some traders turn to smuggling networks to meet demand in Gaza, where smaller merchants look to sell contraband.

Two merchants and a trucker who is part of Gaza's union informed AP that sometimes administration agencies ask for specific items to keep functioning – fuel, spare parts for civil defense vehicles or generators. Hospitals additionally turn to smugglers, for drugs and some equipment.

And tribal elders request smuggled goods for their communities, including medicines that are in short supply, a tribal leader informed AP, on condition of anonymity over worries for his safety.

Two traders who control a sizeable portion of the smuggling scene and an aide to a third informed AP they send lists of contraband goods they want to import to "coordinators" – Israeli and Palestinian middlemen in Israel and the West Bank. Coordinators line up merchandise, then arrange a route into Gaza.

Commercial goods and aid mostly go through the Kerem Shalom crossing in the south, where every truck is inspected. The military additionally has routes in and out of Gaza for its vehicles. Smugglers employ both avenues, bribing soldiers to smooth the way for trucks or carry goods in military vehicles, according to the traders and Israeli court documents.

Though less often, according to merchants and Israeli administration statements, trucks belonging to humanitarian groups are additionally employed sometimes. Smuggling accounts for much of Gaza's economy.

Smuggling has become vital to Gaza's economy – it's a major source of income as most of the population "lost their source of living, " the tribal leader remarked.

Meanwhile, a number of top merchants estimated that smuggling makes up over half their total operations and can bring in more than 70% of profits.

Payments go to plenty of players, including drivers and warehouse workers in Israel and Gaza, stated one major trader. "You are paying at every step, plus the price of the goods themselves, " he remarked.

All those costs obtain passed on to the residents in Gaza. Residents say a vehicle battery can go for more than $2, 300, compared with $140 prewar. Solar panels sell for $3.25 per watt, from 16 cents a watt.

"The smuggling flourished in the second half of 2024 as the market started to dry up, " remarked Mohamed Abu Taha, a Gaza resident and father of one, noting that chicken, meat, and other food staples were brought in covertly. "Baby formula and pet food were also smuggled."

But perhaps no items are as in demand as cigarettes and tobacco. The cost per pack, residents say, has hit as much as $140 lately, and over $1, 000 during Israel's total blockade.

"You could find two or three men sharing one cigarette, " Abu Taha remarked. Some resort to smoking a dried green called molokhia. COGAT did not reply when asked why cigarettes are banned.

For smugglers, cigarettes and nicotine products are straightforward to hide and the potential profit enormous. Shipments of thousands of packs have been hidden in Israeli military vehicles, commercial trucks, aid shipments and even hollowed-out pineapples, according to traders, court documents and Israeli official statements.

In practice, the Hamas-led administration is taking in capital on smuggled goods, sources say.

On smuggled goods, Gaza's administration profits primarily by taking its percentage of the rate but doesn't engage in commercial smuggling directly or oversee the trade, according to merchants and Barbakh, the economy ministry official.

Two major traders remarked the administration demands for funds climbed since the ceasefire accord. Both remarked they were summoned by Hamas authorities over goods they smuggled to Gaza over the course of the war. A settlement was reached, and one of the traders remarked he paid $3.5 million; the other, around $3.75 million.

Two senior authorities in the Hamas administration stated – on condition of anonymity since they weren't authorized to speak to journalists – the capital helps fund social services and pay salaries for the tens of thousands employed in Gaza's civil service and police force. They estimated up to $100 million had been collected on smuggled goods since the ceasefire.

Barbakh remarked the administration doesn't have exact figures on smuggled goods "because these operations are conducted clandestinely, away from the oversight of relevant authorities."

In response to AP questions, Ismail al-Thawabta of the government's media office remarked none of the collected funds go to Hamas' military wing. He remarked all resources are directed to providing services to residents and "maintaining the continuity of public facilities under the exceptional circumstances in the Gaza Strip." The administration destroys any expired goods it confiscates, including groceries.

But the two senior authorities – as well as two merchants and one trucker – informed AP that Hamas sells confiscated cigarettes. Al-Thawabta did not respond when asked regarding the claim.

'He is the master, ' an official notes of one smuggling coordinator.

Smugglers appear to wield enormous influence. In court documents, Israeli prosecutors pointed to one mysterious smuggler known only as Abu Bassel who they remarked has "numerous connections within the Israel Police."

In one instance described in the documents, Israeli police stormed a warehouse in a Jewish settlement in the West Bank full of cellphones and cigarettes that smugglers were loading onto trucks for Gaza. One of the smugglers called Abu Bassel and handed the phone to an officer, the document notes, and after a conversation, police called off the raid, leaving without arresting anyone or confiscating any goods.

All of those who spoke to AP remarked Abu Bassel is the smuggling world's biggest coordinator. They additionally stated they knew nothing regarding him – his real name, whether he was Israeli or from the Palestinian territories, or how he built his network.

"He is the master, " a senior Gaza Chamber of Commerce official remarked. "Nothing can enter Gaza without his stamp."

One Gaza merchant remarked he has spoken by phone with Abu Bassel but wouldn't provide AP the number. He remarked the shadowy figure uses connections with the military and intelligence to resolve difficulties for shipments. "Many police raids have been thwarted because of him."

As a cover, the Israeli court documents additionally have no details concerning Abu Bassel's identity but noted he uses an aid organization, Al-Mughtarib Al-Falastini. The group denied in a Facebook post that it was involved in smuggling. Israeli indictments show some of the scope of smuggling.

Since late 2025, Israeli authorities have broken up a number of alleged smuggling rings, indicting more than a dozen residents, including reserve soldiers operating in Gaza. But the traders, merchants and truckers who spoke to AP say that's only a fraction of those involved.

Taken together, the developments around prices soar as Gaza smuggling booms; officials, soldiers and middlemen are accused point to a situation that is still moving, and the coming days should bring more clarity.