Egypt's tunnel closures hit Gaza builders

GAZA CITY (Reuters) -- Business was booming for Gaza brick-maker Yasser Qreqea, until neighboring Egypt shut down smuggling tunnels across its border that were funneling arms to militants in the territory and cement and other basic goods to everyone else.

Overnight the price of building materials soared in the Gaza Strip, hitting Qreqea's key customers and, industry sources said, slowing the construction of apartments, roads and houses across the enclave run by Hamas.

"Business is dead and we are the ones losing out," the businessman told Reuters in his factory in the densely-populated Zeitoun neighborhood of Gaza City.

A handful of workers stacked bricks in his already bulging store room, but Qreqea sat idle, waiting for customers.

Egypt said it started flooding and sealing the network of tunnels in February to cut a two-way flow of smuggled weapons that was destabilizing its border area in the Sinai peninsula, where separate groups of militants operate.

Cairo's decision also cut a lifeline to around 1.7 million Palestinians in Gaza, hit by a blockade on a wide range of goods imposed by Israel in 2007 after Hamas took power.

The tunnels had been used to bypass the blockade and smuggle in all kinds of merchandise, including cars, livestock and fuel -- around 30 percent of all goods that reached the enclave, according to some estimates. more

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