GAZA CITY, Gaza Strip (AP) — The coup in Egypt has cost Gaza's Hamas its most important foreign ally, while more and more ordinary Palestinians are getting caught up in the growing animosity between Egypt's new government and Gaza's Islamic militant rulers.
Thousands of workers in already blighted Gaza have been laid off because Egypt has closed the border, while some of the tens of thousands of Palestinians studying and working in Egypt are keeping a low profile for fear being targeted in an anti-Hamas backlash.
At issue are Hamas' ties with Mohammed Morsi, the Egyptian president whom the Egyptian military toppled a month ago, amid mass protests against him. Egypt's new rulers have portrayed Hamas and Morsi as co-conspirators in a plot to destabilize Egypt and harm the country's interests.
Hamas is the Gaza branch of the Muslim Brotherhood, the region-wide movement whose political rise in the wake of the Arab Spring propelled Morsi to the presidency last year. Morsi is being held on charges he and Hamas plotted a 2011 attack on an Egyptian prison that freed him, but killed four inmates.
The icy wind now blowing from Cairo is an existential worry for Hamas. Shunned by the West as a terror group, it had hoped Morsi could break it out of international isolation.
Now, with Israel keeping Gaza largely sealed on one side and Egypt on the other, the territory is back to where it was 2 ½ years ago, before Egyptian ruler Hosni Mubarak was ousted.
So Hamas is back in survival mode, rather than dreaming about making Gaza prosperous and turning it into a second Singapore. Yet it can't openly criticize the new Egyptian regime, for fear of inviting a more severe clampdown.
"We are not happy," Gaza's deputy foreign minister, Ghazi Hamad, said of Egypt's recent measures against Gaza, including the sealing of dozens of smuggling tunnels under the joint border, a vital Gaza supply line. But, he added, "we have to be wise and patient, and wait to see what will happen."
Hamad is still in touch with an Egyptian intelligence officer to sort out day-to-day border problems. These days, the two mainly pick up the phone to complain — Egypt about Hamas allegedly allowing Gaza militants to slip into Egypt's troubled Sinai region and Hamas about Egypt all but closing Gaza's main gate to the world.
In public, Hamas has remained largely silent, even as the fallout ripples across Gaza, home to 1.7 million people. The tunnel closures have driven up prices of cement, gravel and fuel. As a result, builders have stopped working and have laid off as many as 20,000 workers, said Nabil Abu Muaeileq of the contractors' association.
A majority of Gaza's 1,200 fishermen are staying in port because Egypt has barred them from entering its waters as part of its new security measures. Coupled with Israel's long-running restrictions on Gaza fishing, there's little point in heading out to sea, said Nizar Ayesh, head of the local fishermen's union.
A growing Egypt-induced fuel shortage has also exacerbated Gaza's toughest practical problem, a chronic lack of electricity, including rolling blackouts of more than 10 hours a day.
The future looks even bleaker because Cairo's anti-Hamas policy, closely linked to the Egyptian military's intensifying campaign against the home-grown Muslim Brotherhood, is likely to continue.
Anti-Morsi media in Egypt have portrayed Hamas as being responsible for many of the country's troubles, from fuel shortages to militant-driven lawlessness in the Sinai.
Bolstering suspicions of Hamas, several Palestinians have been arrested in the Sinai, including one on Thursday for allegedly taking part in a recent attack on a border post in the area.
Hamas officials complain privately that the new regime in Egypt systematically demonizes their movement to justify the campaign against the Egyptian Brotherhood.
Some Palestinians in Egypt said they're worried about the heated atmosphere.
"Honestly, it is terrifying here. I am no longer able to move as I want," said Saadi Salah, a 22-year-old from Gaza who studies information technology in Cairo and now mostly stays in his dorm room, ordering in food.
Palestinian Sameh Abu Jaffar, 48, who owns a shoe factory in Cairo, said his children no longer go to the local sports club and his wife was ordered out of a taxi recently when the driver heard her Palestinian accent. "Life here is getting worse by the day," he said, adding that Egyptians "think all Palestinians are Hamas."
Others said complaints of anti-Palestinian incitement are exaggerated.
Barakat al-Farra, the Palestinian ambassador in Cairo, said about 100,000 Palestinians live in Egypt, and that he is not aware of any being targeted.
"There might be some little incidents here and there, but we can't say the Egyptian people are doing anything against the Palestinians here," said al-Farra, who reports to Hamas' main political rival, Western-backed Palestinian President Mahmoud Abbas, from whom Hamas seized Gaza in 2007.
The West Bank-based Abbas met with Egypt's new rulers earlier this week, sparking immediate allegations by Hamas officials that he was badmouthing them in Cairo.
An Egyptian official said the new regime will go after selected Hamas leaders, as part of its crackdown on the domestic Brotherhood. For example, Hamas officials who have denounced the ouster of Morsi as a coup will not be able to travel abroad via Egypt, said the official who spoke on condition of anonymity because he was not allowed to talk to the media about his government's deliberations.
For Hamas, the Brotherhood's loss of power in Egypt is a stunning setback.
Morsi had significantly eased the Gaza border closure that Mubarak had enforced in coordination with Israel. Morsi had also permitted Hamas figures from Gaza and the Palestinian diaspora to meet in Cairo, where the Islamic militants held a leadership election in April.
Hamas believed it was only a matter of time before Morsi agreed to what it wanted most — a full-fledged trade crossing between Gaza and Egypt that would allow Gaza's economy to flourish and entrench Hamas rule.
Instead, Egypt's tunnel closures are costing the Gaza government a major source of revenue — taxation of the fuel, cement and consumer goods coming in through the underground passages.
Even before the coup, the Hamas government had difficulty covering the monthly public sector payroll of 70 million shekels ($20 million), mainly because patron Iran had decided to punish Hamas for refusing to side with Iran's main regional ally, Syrian President Bashar Assad, in that country's civil war.
It's not clear how long the Hamas government can operate on a growing deficit.
The Egyptian official said some restrictions on Gaza will eventually be eased to prevent a humanitarian crisis. Egyptian authorities may allow in some shipments of fuel and cement to keep the territory afloat, he said.
Travel restrictions might also be eased eventually, he said. At the moment, only medical patients and those with residency abroad can leave Gaza. Thousands are on a waiting list, hoping to return to jobs and universities abroad.
Associated Press writers Maggie Michael in Cairo and Karin Laub in Gaza City contributed reporting.