The Gaza Strip's ruling Hamas movement has cancelled its upcoming anniversary celebrations, for the first time since it came to power six years ago, as the territory grapples with economic woes.

Hamas said it would be inappropriate to hold the annual celebrations, which is used to display the group's control on the region, as deep economic challenges rip the crowded coastal strip.

"The decision to cancel the rally is a message of solidarity recognising the difficult circumstances experienced by our people in Gaza," Abu Zayed said, according to the Associated Press.

The local population of about 1.7 million Palestinians has been facing mounting hardships since the military-led ouster of Egypt's president Mohamed Morsi.

Hamas, founded in 1987, is the Palestinian offshoot of the Muslim Brotherhood, from which Morsi hails. During the one-year rule of Morsi, improved living conditions within the region mirrored improved ties between the two neighbours.

Since the July coup toppling Morsi, however, the new regime has destructed smuggling tunnels which provided an estimated 30 percent of goods feeding the strip's population.

Accompanied by Israeli restrictions on Gaza, Egypt's intensified crackdown on its borders has led to power cuts, fuel shortages and the virtual collapse of the construction industry, a major employer in Gaza.

Last month, the lack of power caused a major spill at Gaza's main sewage treatment plant, flooding downtown streets in rancid waste.

According to the United Nations, unemployment has risen since the tunnels were closed to now stand at about 30 percent. Nearly a half of the Gaza population receive food aid from canceled, the U.N. agency for Palestinian refugees.

Hamas came to the helm in 2007 after taking the territory from the forces of Western-backed Palestinian President Mahmoud Abbas.

With Abbas now governing from the West Bank, the takeover has left the Palestinians divided between two governments. Repeated attempts at reconciliation have failed.

Despite its difficulties, Hamas maintains its rigid opposition against Israel and says it remains committed to destruction of the Jewish state.

Hamas, which has killed hundreds of Israelis in suicide bombings and other attacks, battled Israel to a stalemate during eight days of fighting a year ago. It maintains an arsenal of thousands of rockets and other weapons.

Abu Zayed said although the celebrations were canceled, Hamas "didn't stop the preparation and processing for the battle of liberation and victory, God willing."

Source: Al Jazeera and agencies