Rafah: Striking at the heart of Hamas operations

IDF operations in Gaza credit: IDF Spokesperson
IDF operations in Gaza credit: IDF Spokesperson

The tunnels beneath Gaza's southernmost city provide Hamas with cash and weapons smuggled in from Egypt.

Prime Minister Benjamin Netanyahu has instructed that preparations begin for a ground offensive against the only Hamas stronghold in the Gaza Strip that the IDF has not yet taken - Rafah. The plan has aroused a huge international response, including from the US and Egypt, which oppose the move due to the large Palestinian population in the region, many having fled from the fighting to the north. However, Israel claims that the operation in Rafah is a major part of the war and uprooting the power of Hamas in the Gaza Strip.

What is happening in Rafah?

There are currently 1.3 million Palestinians in Rafah, the southernmost city in the Gaza Strip, with most of them arriving since the start of the war. Previously the city had 300,000 residents. In addition, 170 aid trucks enter the Gaza Strip through the Rafah crossing every day. Before the war 500 trucks brought in goods every day as well as 100 aid trucks.

Even before the war Rafah was a densely populated city with high unemployment, a shortage of housing and a problematic water supply. Due to the overcrowding, residents tended to keep building extra floors onto their homes without elementary engineering planning.

What is the significance of Rafah for Hamas?

Rafah is at the core of economic activity for Hamas because it is an important stop for cash being smuggled in from Egypt via Sinai. Jezreel Valley Academic College head of the Middle East Studies Program Dr. Ido Zelkovitz tells "Globes," "The crossing under Rafah is very important for the existence and maintenance of Hamas's economy."

"Not only weapons pass through the tunnels beneath Rafah, but also a lot of money, goods, even vehicles and animals. The geographical location of Rafah, and being the gateway to the Gaza Strip to the world, makes it one of the most important and strategic foci for Hamas. Without control of Rafah, Hamas, which relies on smuggling, would have its oxygen pipeline to the world cut off."

In 2015, Egypt acted against the tunnels on the Sinai-Gaza border, when they flooded them with water. Today Egypt is more concerned about fortifying the border fence, with the aim of preventing Gazan refugees from entering Sinai. On the other hand, Cairo is not working to eradicate the tunnels for the transfer of goods, even though the Egyptian government is well aware of them.

What are Rafah's characteristics?

Dr. Zelkovitz explains, "Rafah is a tribal region and in economic terms the tunnels, it is controlled by Hamas and the local clans." The local clans maintain commercial relations with Hamas and over the years Hamas has paid royalties to the clan leaders to prevent them from rising up against it.

In effect, Hamas and the local clans divide up the income from the tunnels from Sinai. The clans take part in the smuggling operations, even though they are not members of Hamas, because it is in their economic interest.

Who manages the money flowing into Gaza today?

Dr. Zelkovitz explains, "Goods that come in as part of the humanitarian aid are received by UNRWA, which as we have learned is controlled by Hamas. In places where the IDF does not enter or leave, those who take responsibility are the people of the Gaza government mechanisms of Gaza, which is Hamas.

"Hamas built its own control mechanisms after taking over the government offices of the Palestinian Authority in the Gaza Strip and these offices are still in charge of day-to-day life. As long as the Palestinian Authority has not returned, it can be said that Hamas still has the ability to control civilians, even if it is limited. Israel, at the moment, has no desire to collapse government ministries because it does not want to take direct control over daily life in the Gaza Strip."

From where does Hamas raise the money for its activities?

The Palestinian terror organization has created widespread sources of financing including aid from friendly countries like Iran, and Turkey. Alongside this, to circumvent sanctions against it in the west and prevent the confiscation of funds, Hamas operates an extensive array of assets with a focus in Turkey, an international network of charity organizations, and use of cryptocurrencies.

How big is Hamas's budget in Gaza?

Estimates are that Hamas transfers at least $1 billion to the Gaza Strip each year. This is the equivalent of the annual budget of Somalia, a country with a population seven times the size of the Gaza Strip.

Is Hamas continuing to use large amounts of cryptocurrencies?

Problem not. After Operation Guardians of the Walls in 2021, Hamas received $400,000 in cryptocurrencies and now things are not like that. This, follows extensive activity by Israel, which monitored and thwarted some 190 crypto transfers between December 2021 and April 2023. According to blockchain research company TRM, the amount Israeli has seized is worth tens of millions of dollars in cryptocurrencies..

What is the extent of Iranian funding for Hamas?

The US Secretary of State estimated in the past that Iran transfers to Hamas $100 million annually, but some estimate the aid at double. These transfers are not made directly, but often via third country straw companies.

What is the value of assets that Hamas possesses?

The US Treasury believes that Hamas manages assets worth $500 million in countries like Saudi Arabia, the UAE and Sudan and especially in Turkey. The luxury AG Plaza Hotel in Istanbul is 75% owned by people connected to Hamas. The terror organization also owns shopping malls and mines in various countries.

Another significant conduit in the transfer of funds to Hamas terrorist operatives is money changers. Back in 2019, sanctions were imposed on the Redin moneychanger chain, which operates branches in Istanbul and Gaziantep in Turkey. At the same time, two Iraqi citizens, Ismail Tash and Marwan al-Rawi, were identified as key figures in this activity for Hamas.

Who manages the global financial system of Hamas?

Like Yahya Sinwar, 55-year-old Zaher Jabarin was also released in the Shalit deal in 2011. Today, he practically manages the entire field of membership and donations of the terrorist organization. Jabarin manages the entire complicated international financing network from Istanbul, without interference from the Turkish government, which under Recep Tayyip Erdogan allows them to use the banks.

"Jabarin is one of the people responsible for the financial portfolio," observes Dr. Zelkovich. "But I assume that the senior leadership, led by Khaled Mashal and Ismail Haniyeh, also has access on this issue."

Is Hamas's financial model exceptional in terms of international terror?

"Hamas's model is very typical for a terror organization," Dr. Michael Barak, senior researcher at the Institute for Counter-Terrorism (ICT) of Lauder School of Government Diplomacy and Strategy, at Reichman University, tells "Globes." "Hamas receives state help from Iran, Turkey, Algeria and Malaysia.

"Algeria is motivated by solidarity against imperialism, with Algeria and Hamas seeing Israel as an imperialist implant. On top of that, there is rivalry between Algeria and Morocco, which took advantage of the Abraham Accords to promote recognition of its annexation of Western Sahara. In Malaysia, Hamas has established outposts, and also an association responsible for developing awareness on the Palestinian issue, which donates money to Hamas from there. Already a decade ago, Hamas members in Malaysia practiced operating drones."

Published by Globes, Israel business news - en.globes.co.il - on February 15, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

IDF operations in Gaza credit: IDF Spokesperson
IDF operations in Gaza credit: IDF Spokesperson
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