Smuggling networks are profiting handsomely from Israel's restrictions on goods entering Gaza, with cigarettes, electronics, medicine and other restricted items flowing into the territory through a web of traders, middlemen and allegedly corrupt Israeli soldiers, according to an Associated Press investigation based on court documents and interviews with more than 20 traders, merchants, truckers, officials and residents.
The trade has driven prices for everyday goods to extreme levels. A vehicle battery that once cost $140 now sells for more than $2,300 in Gaza. Solar panels have jumped from 16 cents per watt to $3.25. Cigarette packs — banned since the war began in October 2023 — can reach $140 each, residents told AP.
Israel controls all entry of food, aid and commercial goods into Gaza under its blockade policy. The military classifies approximately 150 categories of items as "dual use," including concrete, vehicle parts and X-ray machines, asserting they could be repurposed by Hamas for military purposes. Israel has given only 12 traders permits to import commercial goods through approved crossings.
What the Left Is Saying
Humanitarian advocates and progressive critics argue that Israel's blockade restrictions have created an unsustainable humanitarian crisis forcing civilians into illegal markets at devastating costs. The United Nations and aid groups have repeatedly called for expanded access to basic goods.
Palestinian officials and residents told AP that ordinary people bear the burden of inflated prices caused by smuggling networks. "The occupation has left no other option before us. Smuggling has become routine," one trader said, arguing that some in Israel's military are willing to help — for a price. "We benefit, they benefit and the people in Gaza benefit because we provide goods, including food, to the market."
Mohammad Barbakh of the Palestinian Economy Ministry told AP that authorities collect up to 20% of smuggled goods' prices when merchants report them, rising to 80% if items are unreported. Tribal elders also request smuggled medicines for communities facing shortages.
Gaza residents question why basic civilian goods face restrictions. "I don't understand the harm in allowing fans through the crossings," said Mohamed Abuel-Enein, a displaced resident from Rafah. "What would they make with them? Rockets? We can't live in these tents."
What the Right Is Saying
Israeli officials defend their dual-use classification system as essential to preventing Hamas from acquiring materials for weapons manufacturing. The military says it takes smuggling seriously and works to prevent it.
The Israeli military said via email that any cases of suspected involvement by military personnel are "examined and handled in accordance with the law." COGAT, the military department coordinating entry of goods into Gaza, stated it has allowed some dual-use items including generators and X-ray machines in specific cases under strict monitoring.
Israeli court documents detail efforts to crack down on smuggling rings. Since late 2025, authorities have broken up several alleged networks and indicted more than a dozen people, including reserve soldiers. In one case, prosecutors accused two Israeli brothers of running a smuggling ring out of Kiryat Gat, allegedly bribing soldiers including Bezalel Zini — brother of the Shin Bet head — to smuggle thousands of cigarette packs in his vehicle.
Ismail al-Thawabta of Hamas's media office said collected funds go toward services and maintaining public facilities. "None of the collected funds go to Hamas' military wing," he told AP.
What the Numbers Show
AP documented dramatic price increases for goods in Gaza:
Vehicle batteries: rose from approximately $140 prewar to more than $2,300 currently — a 1,543% increase.
Solar panels: increased from 16 cents per watt to $3.25 per watt — a 1,931% increase.
Cigarette packs: now sell for up to $140 each; reached over $1,000 during Israel's total blockade period.
Israeli court documents allege the scale of money involved is substantial:
One smuggling ring earned approximately $2.2 million from October to December 2025 runs before arrests.
Other defendants are accused of making $1 million to $3 million in individual operations.
Hamas officials estimated up to $100 million has been collected on smuggled goods since the ceasefire began.
Traders said cigarettes and tobacco generate the largest profits, with shipments hidden in military vehicles, commercial trucks, aid shipments and even hollowed-out pineapples. Several top merchants estimated smuggling makes up over half their total operations and can bring in more than 70% of profits.
The Bottom Line
The investigation reveals how strict import controls have created lucrative black markets that benefit smugglers on multiple sides while devastating Gaza's civilian population, most of whom remain displaced by the ongoing war. Israeli authorities face allegations that some soldiers are profiting from the very restrictions they are supposed to enforce.
Israeli military officials said suspected cases involving their personnel are investigated, but did not respond to detailed questions about the scope of soldier involvement or government oversight of smuggling networks.
Gaza's Hamas-led government also profits through taxation of smuggled goods — a system critics say legitimizes illegal trade while raising funds for the administration. The ceasefire deal reached in October has increased overall flow of goods into Gaza, but restrictions remain well below prewar levels and prices stay astronomical for most residents.
What to watch: Whether Israeli military investigations lead to broader accountability measures, whether dual-use classifications are reconsidered for genuinely civilian items like fans and batteries, and whether the ceasefire framework addresses humanitarian access as negotiations continue.