Hamas has cracked down on merchants in the Gaza Strip, issuing new regulations that ban importing goods from Israel without prior permission from the Islamic group.

Hamas decided on the new policy this week after recording a drop in the demand for merchandise and supplies from the tunnels it controls along the Philadelphi Corridor between Gaza and Egypt.

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Last June, Israel decided to ease the restrictions on the transfer of goods to the Gaza Strip in response to the international criticism it faced following the botched navy raid on the Mavi Marmara Turkish passenger ship.

Under the new Israeli regulations, Palestinians from Gaza are allowed to import all goods except those that appear on a blacklist and that are mostly dual-use, meaning that they could be used for both civilian and terrorist purposes.

Ibrahim Jaber, a senior Hamas Finance Ministry official, said this week that Israeli products that have a local substitute in Gaza – such as furniture, plastics, soft drinks and a variety of food products – would be banned.

Another Hamas official was quoted in the Arab press as saying that the group preferred to do business with Arab countries such as Egypt, rather than Israel.

Israeli defense officials said Tuesday that the move was likely an indication of the financial distress Hamas was encountering following Israel’s decision last year to relax restrictions over the Gaza Strip.

“Hamas wants to retain its hold on the market,” one official explained.

According to information received by Israel, Palestinian merchants who break the Hamas ban on certain Israeli goods will face legal charges.

Hamas has also stopped the daily fuel supplies it used to receive from Israeli energy company Dor Alon. In the past, Dor Alon used to transfer about 1,000 liters a day to the Gaza Strip for the power station, but now Hamas prefers to receive its fuel from a contraband pipeline it has set up through a tunnel under the Egyptian-Gazan border.

Israeli officials said they were prepared to resume fuel supplies as per the request of the Palestinian Authority.

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