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GAZA (Reuters) - Smuggled through tunnels from Egypt, sheep were not selling well in a Gaza market on the eve of a Muslim holiday in which the animals are slaughtered and their meat is donated to the poor.
"People here are just watching one another and nobody is buying," complained sheep merchant Omar Fuji. "The prices are higher because we had to pay a $100 fee to the tunneller on every sheep that came through."
Eid al-Adha, the Festival of Sacrifice celebrated by Muslims worldwide this week, is shaping up to be a miserable holiday for many of the 1.5 million Palestinians in the Gaza Strip.
Israel's blockade of the borders of the Hamas-controlled territory and a surge in violence along the frontier have deepened economic hardship in the impoverished enclave.
"Abu Ammar (the late Yasser Arafat) promised to make Gaza the new Singapore," one market-goer said.
"Instead, it has become Tora Bora," he said, referring to the al Qaeda stronghold in eastern Afghanistan attacked by U.S.-led forces in 2001.
Political divisions between Hamas and Palestinian President Mahmoud Abbas's Fatah faction have added to a sense of helplessness among Gazans.
Palestinian pilgrims bound for Mecca for the haj pilgrimage were prevented from leaving the Gaza Strip via Egypt. Hamas and Fatah blamed each other for the hold-up.
"It is a difficult Eid. There are no salaries, no cash at banks. Electricity is cut most of the day," said Ezzel-Deen Abu Amira, a 42-year-old civil engineer.
Some 77,000 Gaza employees have not received their November pay and banks have been shut since Thursday because they do not have enough money to operate. Israel cut off imports of cash and other goods this month as cross-border violence rose.
The International Monetary Fund and the World Bank have been cautioning about the consequences of the cash shortage in Gaza banks.
"The inability of employees and aid beneficiaries to draw their salaries and aid payments raises the risk that, over time, these groups would turn to employment opportunities and benefits provided by those with easier access to cash from other sources (such as through the tunnels between Gaza and Egypt)," the IMF said in a statement.
Tunnels are built and run by traders who operate largely within a system regulated and overseen by Hamas, which in turn, merchants say, raises funds from them by levying fees.
At one tunnel between the Gaza Strip and Egypt, a masked digger watched as his workers pulled cattle from its shaft. Such underground enterprises, he said "alleviated the pressure on people" that Israel's blockade had brought.
But at the Gaza sheep market, Abu Mohammed, who sells knives used to slaughter animals, said tunnellers brought in goods they believed would net them heavy profits instead of products that people really needed.
"We are exploiting one another. We are helping Israel against ourselves," he said.
Even Palestinian professionals see tunnels as cash cows.
Engineers, teachers and doctors have got into the smuggling business, investing money with merchants connected with the tunnel trade and hoping for a hefty return.
"Where else can you make a 30 percent profit?" asked one Gaza professional.
Editing by Louise Ireland