Cooperation between Gaza’s Hamas rulers and Islamic State’s affiliate in Sinai has decreased noticeably in recent weeks, but documents seen by The Times of Israel show the two organizations continue to coordinate and help each other in many key areas.

Despite pressure from Egypt, which is battling an ongoing insurgency led by the so-called “Sinai Province” of IS, Hamas has refused to crack down on smuggling by IS through tunnels run by its members under the Gaza-Sinai border. Instead, the Palestinian terror group has looked to this activity as a source of income, and recently raised its taxes on goods brought into the Strip by IS smugglers.

This marks a shift in policy from recent months, during which Hamas arrested IS members in the Strip in a bid to curb the group’s activities. The crackdown led to the shuttering of the IS-operated smuggling tunnels. These tunnels, sources say, were recently reopened.

Hamas is now permitting IS members to run a media production operation inside Gaza, out of the reach of the Egyptian military, The Times of Israel has learned. This operation has produced propaganda materials that include messages claiming responsibility for terror attack in Sinai, Cairo and other sites within Egypt.

Egypt is aware of these activities, including the media office, but has apparently chosen to turn a blind eye to this cooperation.

In recent days, attacks by the IS affiliate against Egyptian forces have ratcheted up in the El Arish area on the northern coast of the Sinai peninsula, leading to a sharp spike in the death toll among Egyptian soldiers. The weaponry used in these attacks is believed to have come from Gaza.

It is not clear why Egypt is choosing to ignore the renewed smuggling, or the Gaza-based media office that has opened under Hamas’s rule.

One assessment suggests these activities have been financially lucrative to some Egyptian military commanders in the area. It is also likely that the Egyptian army is wary of antagonizing Bedouin tribes in the northern Sinai, from which IS draws many of its fighters and for whom smuggling into Gaza is an important source of income and jobs.

Whatever the cause of Egypt’s apparent indifference, officials believe it is harming both Egyptian and Israeli security. For example, each time Egypt opens the Rafah crossing to humanitarian aid and to allow people to transit in and out of the Strip, some 1,000 tons of concrete quietly cross the border as well. Some of it is sold at an exorbitant price to help refill Hamas’s coffers, and the rest is funneled directly to tunnel construction.

In a letter dated December 4, Gaza’s Consumer Protection Council chief Dr. Raed Zaki al-Jazar complained about Hamas’s taxing of goods coming through border crossings, but not those coming through tunnels.

The letter, addressed to the director of Hamas’s national economy ministry, Dr. Ayman Abed, notes that this raises the price of goods coming from the crossings, artificially reducing their competitiveness. Jazar also protested that goods coming in through smuggling tunnels are not officially tallied. Changing this policy would encourage fair competition, he wrote.

A copy of a letter from Gaza Consumer Protection Council chief Dr. Raed Zaki al-Jazar about Hamas taxation of imports.

A copy of a letter from Gaza Consumer Protection Council chief Dr. Raed Zaki al-Jazar about Hamas taxation of imports.

The letter was sent before IS shuttered its tunnels in Rafah in protest at Hamas’s arrest of some of its members.

Another document seen by The Times of Israel reveals that the Hamas government recently approved a tax bump for a wide variety of goods entering via the tunnels. A ton of cement saw an import tax jump of $20, from $35 to $60. A similar increase was instituted for iron (from $40 for a ton to $65), and even on fruits and vegetables (from $15 per ton to $35), as well as electrical appliances.

Hamas has also raised the prices it is charging when it resells these goods within Gaza. A ton of cement that has cost roughly NIS 550 ($144) is now being sold by the Hamas government for about NIS 800 ($209).

This income is supplemented by senior Hamas officials, who the Egyptians have allowed to travel in and out of the Strip through the Rafah crossing with the full knowledge that they carry large amounts of cash in their luggage when they return.

According to sources in Gaza, this massive IS-aided smuggling operation is being managed by the heads of Hamas’s military win in the central and southern parts of the Strip, with Muhammad Shabana, commander of Hamas forces in Rafah, at the top of the pyramid. Other leaders of the operation include Muhammad Sinwar, commander of Hamas’s forces in central Gaza and the city of Khan Younis, and Hamas’s military intelligence chief Ayman Nofal, who commanded the central region until recently. Emir Khaled Tilah, a senior official in the group’s military wing and personal owner of several smuggling tunnels, is also involved.

Hamas is also continuing to care for wounded IS fighters who are brought to its hospitals through the tunnels. A key figure in providing this aid is Dr. Muhammad Rantisi, brother of the late Hamas leader Abdel Aziz Rantisi, who was assassinated by Israel in 2004. Rantisi is a well-known orthopedist at Shefa Hospital in Gaza who has close ties to Hamas.