Egyptian soldiers in Rafah, Gaza
Egyptian soldiers in Rafah, Gaza Abed Rahim Khatib/Flash 90

The Egyptian buffer zone along the Sinai border with Gaza has sent prices soaring in the Hamas-ruled enclave, after the Nile state cracked down on illegal smuggling tunnels to Sinai that were reportedly used by Hamas to arm lethal attacks on Egyptian soldiers.

The price of cigarettes nearly tripled in Gaza, with local merchant Imad Shalbiya telling AFP "the tunnels from Egypt have been closed, hitting stocks of cigarettes in Gaza hard and sending prices soaring."

Egypt has been imposing a severe siege so as to cut down the flow of weapons and cash for Hamas in the tunnels; Hamas is a Gazan offshoot of the Muslim Brotherhood group currently clashing with the Egyptian military-backed government. That siege was tightened last October after lethal attacks in northern Sinai.

The smuggling of building materials alone, which were used largely to construct terror tunnels into Israel, totaled over one billion euros ($1.2 billion) annually according to Ayman Abed of Hamas's economy ministry.

Egypt has already destroyed 1,600 smuggling tunnels, and is likewise demolishing homes and expelling Gazans from the border to create a 1 kilometer (0.62 miles) deep buffer zone with the world remaining silent on the moves - a silence gently broken by Amnesty International weeks after the demolition explosions started.

"Prices are very high since Egypt completely closed the tunnels," said Abu Mohammed, who owns a small supermarket west of Gaza City, noting hikes in the price of "milk, legumes and even cheese."

"We used to sell Egyptian cheese for ten or 11 shekels; now it is more than 23 (about $6). I don't sell it anymore. No one buys it at this price," added Abu Mohammed.

Mohammed Safi, who owns an electronics shop, added "prices of mobiles are higher since the blockade of tunnels. We can't get them as before. We used to sell iPhone 5s for 2,200 shekels (around $560), now the price is 2,600 (around $660)."

Under Hamas rule, Gaza's youth unemployment rate is at 63%, with Oxfam saying more than 40% of the overall population is jobless and that 80% live on humanitarian aid.

Rebuilding after Hamas's most recent terror war on Israel has been a thorny issue, with Israel already sending two massive shipments of construction materials in despite the fact that Hamas has already reportedly restarted construction of its terror tunnels into Israel.

On Tuesday 1,120 tons of cement were delivered by Israel to Gaza, after 1,300 tons of construction materials were transferred on October 14.

Despite that, and the global pledge of $5.4 billion to rebuild, Gaza builders' merchant Suheil Tuman said "when the tunnels were open, a ton of cement sold for 380 shekels (just under $100) on the black market. Today it is 3,800 shekels (just under $1,000)."

Economist Amr Shaabane said in the past Gaza prices had always been lower than in Judea, Samaria and eastern Jerusalem thanks to the smuggling tunnels, but "today, Gaza market stalls offer Israeli goods at a price that is more expensive to begin with and to which heavy taxes are added on their entry to Gaza."

AFP contributed to this report.