Egypt hits Sinai to crack down on terror

Kills as many as 20 to ‘restore stability’

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What’s more, these businesses can’t afford to run generators during blackouts that often last for eight to 10 hours a day.

“Our production has decreased by half because there is no electricity,” said Abdullah Al Hales, who owns a carpentry workshop in the center of Gaza City. “I can’t use an electric generator anymore since the price of fuel is increasing, and I can’t afford such additional costs.

“Every so often, my two sons and I have to wake up in the middle of the night to start working in order to benefit from the electricity,” he said.

Agriculture is suffering because of shortage of power to pump water for irrigating crops. Manufacturing has been hit hard. Several factories have had to shut down, and those that remain struggle to maintain production.

That has led to a sharp increase in the price of food: A loaf of bread today costs about 15 percent more than it did in January.

Analysts worry about the growing desperation of the more than 1 million Palestinians in Gaza. Unemployment is at 60 percent, and 80 percent of residents live below the poverty line.

Israel took steps to alleviate the crisis by allowing some fuel through the Kerem Shalom crossing earlier this year. But the Gaza Chamber of Commerce said imports via that route have been halved since April.

Israel is in a conundrum here because, on the one hand, they want to keep the siege on Gaza to weaken Hamas,” Mr. Mekelberg said. “They don’t want Gaza to prosper under Hamas because it goes against what the Israeli government declares are its interests. On the other hand, there is always the fear that Gaza will descend into a humanitarian disaster.”

That is what makes the Israeli and Egyptian handling of Gaza so risky, analysts say.

“In the long term, it’s a big mistake, it’s a mistake on the Israeli side, a mistake in the way that Egypt dealt with it under Mubarak,” Mr. Mekelberg said. “Gaza is a poor place, with high levels of unemployment, high levels of poverty. This only leads to problems and trouble and eventually to violence.”

• Ruby Russell in Berlin contributed to this report.

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