Palestinians are paying elevated prices for basic commodities as an extensive smuggling operation has expanded across the Gaza Strip, according to an investigation by the Associated Press that examined Israeli court documents and conducted interviews with merchants, truckers, and government officials. The illicit trade involves goods ranging from cigarettes and tobacco to medical supplies, fuel, and electronics being brought into the territory in violation of Israeli restrictions. Cigarettes and tobacco, banned since the start of the Israel-Hamas war in 2023, generate the largest profits for smugglers and merchants.
The investigation identified participation from multiple actors across the supply chain, with payments going to Israeli troops, warehouse workers, drivers, and others on both sides of the border, according to traders and court documents. Smuggling networks have long existed to circumvent Israeli blockades that have been in place for two decades, and these operations now pull in millions of dollars. Israeli military authorities stated they take smuggling seriously and examine suspected involvement by personnel, though they did not respond to detailed questions about specific roles in the illicit trade.
Israel restricts quantities of certain goods and prohibits others entirely, classifying approximately 150 categories as “dual use” items—including concrete, vehicle parts, and medical equipment—on grounds that they could potentially be repurposed by militant groups. The military department responsible for coordinating goods entry into Gaza said it has permitted some dual-use items in specific cases under strict monitoring. Gaza’s Hamas-led government also participates in the smuggling economy, receiving a percentage of the value of contraband goods, either through cooperation with merchants or through confiscation when items are discovered unreported.
Since the war began, Israel has tightly controlled all entry of food, supplies, and commercial goods into Gaza, maintaining permits for only 12 senior traders to import approved items. The flow of goods increased following a ceasefire agreement but remains significantly below prewar levels. Senior traders unable to meet demand through official channels have turned to smuggling networks, while hospitals and government agencies also rely on contraband to obtain medicines, fuel, and equipment necessary for operations.
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