The smuggling of goods restricted or prohibited by Israel into the Gaza Strip has expanded significantly, driving up prices, supplying hospitals with scarce medicines and equipment, and generating millions of dollars for smugglers and intermediaries, an Associated Press (AP) investigation has found.
Based on Israeli court records and interviews with traders, merchants, truck drivers, Palestinian officials and residents, the investigation found that a wide range of products are entering the war-ravaged territory through illicit channels, reports AP.
Cigarettes and tobacco are among the most profitable items, while other smuggled goods include fuel, medicines, solar panels, iPhones and medical equipment.
‘Dual-use’ restrictions fuel shadow networks
Israel maintains strict restrictions on some products and completely prohibits others, particularly items classified as “dual-use”. The category includes materials such as concrete, vehicle parts and X-ray equipment, which Israeli authorities say could potentially be used for military purposes by Hamas.
Since the Israel-Hamas war began in October 2023, Israel has maintained tight controls over the movement of commercial goods, humanitarian supplies and food into Gaza.
A total blockade last year halted deliveries for nearly three months, contributing to severe shortages and famine conditions in parts of the territory. Although the flow of goods has increased since a fragile ceasefire took effect in October, it remains far below pre-war levels.
Under current arrangements, Israel has authorised 12 senior Gaza traders to bring in commercial shipments, but Israeli authorities must approve their contents.
Traders and aid workers said the approval process is highly unpredictable, with many shipments rejected because they contain dual-use items.
According to documents from COGAT, the Israeli military body overseeing the movement of goods into Gaza, about 150 broad categories are classified as dual-use, including concrete, steel pipes, asphalt and wooden planks.
COGAT said some goods, including generators and X-ray machines, have been allowed in specific cases under strict supervision.
When legal imports fail to meet demand, traders turn to established smuggling networks to sell products inside Gaza.
Government agencies, hospitals and tribal communities in Gaza now rely on smugglers to obtain essential supplies such as fuel, spare parts, medicines and medical equipment.
“The occupation has left no other option before us. Smuggling has become routine,” an anonymous trader said, alleging that some Israeli military personnel are prepared to assist in exchange for money.
The Israeli military said it takes allegations of smuggling seriously and investigates suspected involvement by its personnel in accordance with the law. However, it did not respond to detailed questions about the alleged role of soldiers or Gaza authorities in the trade.
How the smuggling networks operate
To circumvent restrictions, major traders send orders to intermediaries operating in Israel and the West Bank, who arrange the purchase and transport of goods.
Although trucks entering through the Kerem Shalom crossing are inspected, smugglers allegedly use both commercial routes and Israeli military vehicles to transport contraband, sometimes paying soldiers to facilitate passage.
Merchants and Israeli government statements also indicate that humanitarian vehicles have occasionally been used to transport illicit goods.
With much of Gaza’s economy devastated by the war and millions of people displaced, smuggling has become an important source of revenue.
Several major traders said that illicit goods now account for more than half of their business and generate more than 70% of their profits.
These extraordinary costs are ultimately passed on to consumers in Gaza.
Residents reported soaring prices. A vehicle battery that once sold for about $140 can now cost more than $2,300, while solar panels have risen from around 16 cents per watt to $3.25.
Smuggled food has also become common, including chicken, meat, baby formula and pet food.
Cigarettes and tobacco command the highest prices, with a single pack costing as much as $140, compared with prices that rose above $1,000 during the complete blockade.
According to traders, court records and Israeli statements, cigarette shipments have been found concealed in military vehicles, commercial trucks, aid deliveries and even hollowed-out pineapples.
Hamas administration accused of taxing contraband
Gaza’s Hamas-led administration also receives a significant share of proceeds from smuggled goods, according to merchants and Palestinian officials.
Mohammad Barbakh of Gaza’s Economy Ministry said authorities can collect up to 20 per cent of the value of goods when merchants declare them. The amount can rise to 80 per cent if authorities discover undeclared shipments.
However, Barbakh said authorities lack precise figures because smuggling operations are conducted in secret.
Merchants said Gaza authorities do not directly operate smuggling businesses but systematically collect money from illegal imports.
Two major traders said that they were summoned by Hamas authorities over shipments they brought into Gaza. One paid $3.5 million and the other about $3.75 million.
Two senior officials in the Hamas administration estimated that as much as $100 million has been collected from smuggled goods since the ceasefire.
They said the money helps pay public-sector workers and support social services.
Ismail al-Thawabta, a government media official, said none of the collected money is transferred to Hamas’s military wing and that the funds are used solely to maintain public services and facilities.
However, several merchants and officials alleged that confiscated cigarettes are sometimes resold by the authorities. Al-Thawabta did not respond to the claim.
‘Abu Bassel’ and the smuggling coordinators
The investigation also identified powerful intermediaries who coordinate large-scale smuggling operations.
Israeli court records refer to a key figure known as “Abu Bassel”, whom prosecutors describe as having extensive contacts within the Israel Police.
Traders and officials described him as one of the most influential coordinators in the trade, although his true identity remains unknown.
Court records describe an incident in which Israeli police raided a warehouse in a West Bank settlement where mobile phones and cigarettes were being prepared for shipment to Gaza.
One alleged smuggler contacted Abu Bassel, after which police abandoned the raid without making any arrests or confiscating the goods.
A senior Gaza Chamber of Commerce official described Abu Bassel as a key figure whose approval is required for many shipments to enter Gaza.
Israeli court documents allege that he used a Palestinian aid organisation as a cover, although the organisation has denied any involvement in smuggling.
Israeli cases expose scale of trade
Israeli authorities have dismantled several alleged smuggling networks since late 2025 and charged more than a dozen suspects, including reserve soldiers serving in Gaza.
One major case involves Israeli brothers Eliran and Avi Algarabli, business associate Yaron Peretz and another unnamed Israeli, who prosecutors accuse of paying reserve soldiers to transport contraband into Gaza.
According to indictments, the group allegedly paid reserve soldier Bezalel Zini approximately $120,000 to transport three shipments containing roughly 6,000 cigarette packs in his vehicle.
Other reservists allegedly made four trips into Gaza in a single day, transporting about 20,000 cigarette packs, hundreds of iPhones and medical equipment.
Court records indicate that the operations generated millions of dollars.
The Algarabli brothers allegedly earned around $2.2 million from smuggling trips between October and December, when they were arrested, while other suspects are accused of making between $1 million and $3 million.
Ordinary residents bear the cost
For ordinary Palestinians, the consequences of the restrictions and shadow networks are reflected in acute shortages and soaring prices.
Residents said basic household products such as electric fans, which previously cost around $100, now sell for $500.
Some merchants said Israeli authorities block the import of fans because they are classified as dual-use items.
Mohamed Abu Olwan, a Gaza resident, questioned why such basic products should be restricted.
Mohamed Abuel-Enein, a displaced resident living in Rafah, described how families living in tents desperately need fans and other basic goods to cope with the intense summer heat.
“I don’t understand the harm in allowing fans through the crossings,” he said, describing the daily struggles of families trying to survive the heat with extremely limited access to basic necessities.
