ok we're being told of an humanitarian crisis.


But tunnels being used to smuggle Viagra and iPods???


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Dec. 24 (Bloomberg) -- Inside one of hundreds of white tents on a sandy wasteland in the Gaza Strip, a black pipe snakes its way down a 60-foot shaft and through a quarter-mile tunnel under the border with Egypt.

The other end is connected to a diesel tanker on the Egyptian side -- a source of smuggled fuel for a market so parched some Palestinian drivers run their cars on oil used to fry falafel.

The beehive of tunnels beneath the tent city has become a vital lifeline for Gaza, giving its 1.4 million residents a way around an Israeli blockade that has choked off supplies of gasoline, fresh meat and consumer goods ranging from washing machines to iPods. It may also turn into a bombing target for the Israeli air force following the expiration of a six-month cease-fire with the Hamas leaders who rule Gaza, Israeli strategists say.

“There is hardly any economy left in Gaza without the tunnels,” says Omar Shaban, an economist who runs a consulting group in Gaza City. “It is distorted to have an economy that is so completely dependent on the black market, but it’s a natural result of the borders being closed.”

Ninety percent of all products entering Gaza each month -- as much as $40 million worth of contraband -- comes through the tunnels from Egypt, Shaban says. The underground network is also a crucial source of revenue and weapons for the militant Islamic Hamas movement, which charges a one-time digging fee of 11,000 shekels ($2,750) for each tunnel.

Tighter Restrictions

Israel tightened restrictions on the flow of goods into Gaza after Hamas seized control of the seaside enclave 18 months ago and Palestinians increased rocket attacks on Israeli towns and cities. Hamas and the Iranian-supported Islamic Jihad group are classified as terrorist organizations by Israel, the U.S. and European Union.

Since the cease-fire expired Dec. 19, Palestinians -- mainly members of Islamic Jihad -- have sent about 60 rockets and mortar shells into Sderot and other border towns, causing minor injuries and some property damage.

Israel has staged at least three air raids and killed four Palestinians, according to the Israeli army. Defense Minister Ehud Barak says the country is considering a broader military operation.

“It’s obvious that one of the first places the air force will bomb is the tunnels,” says Yiftach Shapir, an analyst at Tel Aviv University’s Institute for National Security Studies who edits the Middle East Military Balance yearbook. “They’re going to want to shut off access across the border.”

Address Grievances

Egyptian President Hosni Mubarak is meeting with Israeli Foreign Minister Tzipi Livni tomorrow in Cairo to try to resurrect the truce, while his aides are in contact with Hamas. The group’s leaders have said they won’t support a renewal unless Israel agrees to let in food, fuel and construction materials, and address other grievances such as the release of hundreds of prisoners.

Palestinians have been digging tunnels for years under Gaza’s tightly patrolled borders with Israel and Egypt. The largest are about 5 feet high and are accessed through a four- foot square shaft reinforced with scrap wood. A triangular metal-pipe assembly braced above the opening holds a hoist attached to a cable that is lowered and raised by motor.

The goods that come through the tunnels include livestock, cement, steel rods, refrigerators and computer screens, along with Coca-Cola, cigarettes and pharmaceuticals such as the erectile-dysfunction drug, Viagra. At a mobile-telephone store in Gaza City, a smuggled Apple iPod Nano 4-gigabyte model sells for $500. It lists for $149.99 on Amazon.com.

Greater Sophistication

Tunnel owners say they have nothing to do with arms shipments. Israel says weapons and missile parts continue to flow from Egypt, evidenced in part by the greater sophistication of rockets fired from the territory.

Before Israel evacuated its troops and thousands of Jewish settlers from Gaza in 2005, it often tried to shut down the tunnels, which were dug through the foundations of people’s homes in the Rafah refugee camp near the border. The operations had little success as people excavated new tunnels to replace those that were found.

Now there are more than 1,000 by some estimates, sheltered under the white tents that form a virtual railway station. The Tunnel Cafeteria, serving chicken kebabs and hummus, is among the restaurants that have sprouted to serve the subterranean workforce that numbers as many as 6,000. Some tents have signs, including one advertising “Abu Jabal Co. for Selling Gasoline and Breaking the Siege.”

Father of Iron

Owners of the tunnels go by nicknames because the trade remains illegal, even though Egypt tolerates it. One of the busiest operators calls himself “Mouse” because of his slight physique and agility at moving underground. A metal importer is known as Abu Hadid: father of iron.

Abu Albara, a 25-year-old Rafah resident who was unemployed six months ago, says he sold his wife’s jewelry to join a partnership of 10 people that owns three tunnels. Inside his tent, two scrawny cows rise to the surface after being poked and prodded through the tunnels by his staff. Next stop: the slaughterhouse.

“They didn’t really want to come to Gaza,” he jokes, touching off a storm of laughter from a dozen workers who had been snoozing on dusty mats before their tunnel shifts begin.

Daily Sales

Mohammed, 28, a tall man with brown tobacco-stained teeth, owns the diesel pipeline. Wearing a black Pittsburgh Steelers jacket, he displays a ledger showing daily sales have fluctuated between 30,000 and 100,000 liters in the past three months. Demand and prices are sensitive to the unscheduled openings and closings of Israel’s Karni cargo crossing, where diesel fuel is transferred to Gaza, he says.

Next to the fuel line, he’s installed a pipe that carries compressed oxygen into the tunnel so his employees, who work eight-hour shifts, don’t pass out from the fumes and dust. At least 40 tunnel workers have died in the past year, many buried alive when the fragile walls collapsed.

“This is very hard and risky work,” Mohammed says. “I hope the borders will open and I can go into a different business because I don’t want to do this the rest of my life.”