"Over the past several days, a great deal of speculation has mounted here in Gaza that Egypt was going to try to flood those tunnels [and] put steel rods in the ground to prevent those tunnels from operating.

"That created a sense of frenzy and pandemonium here."

'Intensifying siege'

Our correspondent said there was a rush at petrol stations across the Gaza Strip on Sunday as Palestinians tried to stock up on fuel.

"The concern among Hamas officials is that the siege will intensify and that will create an even worse humanitarian situation than the one that already exists," he said.

in depth

  Video: Tunnel trade
  Interview: Quest of a Gaza cyclist
  Video: Egypt 'blocking Gaza tunnels'
  Video: Gaza's thriving tunnel economy

Israel has closed off Gaza to all but very limited basic supplies since Hamas seized it from loyalists of Palestinian President Mahmoud Abbas in June 2007.

The territory has since been dependent on smuggling for various supplies and the border is dotted with tunnels, which often collapse, sometimes claiming the lives of the smugglers.

Sami Abu Zuhri, a Hamas spokesman, told Al Jazeera that the construction of the wall will create a "real disaster in the Gaza Strip".

"We are not talking about borders between Egypt and Israel; we are talking about steel borders between two peoples, one of these two peoples is under siege," he said.

"There are Arab League resolutions that call for breaking the siege imposed on the Gaza Strip. Now, instead of taking practical steps to break this siege, we get surprised with this steel wall.

Gaza 'lifeline'

Abu Zuhri said Hamas officials have contacted Egyptian officials on the matter.

"They [Egyptian officials] have at first denied this, but it can no more be denied because it has been confirmed by what we see and by the definite information we have received," he said. 

"This issue is no longer a political matter. Tunnels represent a real lifeline [for Gaza’s Palestinians] under the closure of Gaza’s crossings, and that is why this wall will truly smother the Gaza Strip."

Abu Zuhri said a Hamas delegation is expected to meet Egyptian officials soon to "reflect the movement’s objection and try to know the reasons behind building this wall".
 
Israel has repeatedly complained that Egypt has not done enough to prevent smuggling into Gaza through such tunnels, which it says are used to supply Hamas with explosives and arms.

But in recent months Cairo has destroyed large numbers of tunnels, using detection equipment provided by the United States.