The usually clogged streets of Gaza City are noticeably quieter. Hospitals are warning that their emergency reserves of fuel, used to power generators, are running dangerously low. Construction sites that until recently throbbed with the sound of heavy machinery are deserted.
Palestinians in Gaza are feeling the impact of regime change next door. Since the Egyptian president, Mohammed Morsi, was ousted by the military on 3 July, not only have Gaza's rulers, Hamas, lost their close political allies, but the Egyptian army has clamped down on the smuggling trade through the tunnels, which for six years have been a major lifeline for the 1.7m population of the tiny coastal strip.
The Egyptian authorities have targeted the underground passages as part of a drive to regain control of the vast Sinai desert, whose population is hostile to Cairo.
At the height of the black market trade between Gaza and Egypt there were thought to be more than 1,000 tunnels employing around 7,000 people – providing Hamas with an income from taxes and permits of millions of dollars a month, estimated at 40% of the government's revenue. But Egypt is thought to have closed or destroyed around 80% of the tunnels.
"The Gaza Strip has lost around $225m during the past month due to the halt of imports, namely fuel and crude materials for construction, such as cement, gravel and steel," said the Hamas economy minister, Alaa al-Rafati.
About 20,000 construction workers have been laid off as a result of the shortage of materials. Israel, which allows consumer goods to be imported into Gaza, until recently forbade the passage of construction materials – apart from small quantities destined for UN projects – on the grounds that they could be use to make weapons or arms storage depots. Small amounts of building materials are now being let in for the private sector.Fuel smuggled from Egypt is half the price of fuel imported from Israel, the quantities of which are inadequate to meet needs. Hamas has introduced rationing in order to give priority to hospitals, power plants and water facilities. The health ministry reported that hospitals' fuel reserves had sunk to 20% last week.
Queues at petrol stations have grown. Amir Daban, 29, one of those waiting in line in Gaza City, said he had no idea when normal supplies would resume. "There is no stability at all. One day we have it, the next day we don't. Nobody is saying when this will end." He added that he could not afford fuel imported from Israel.
At a near-deserted six-storey building under construction, Khalil Hilal, 46, said six of his co-workers had been laid off. "Everything suddenly stopped. No cement, no gravel, no metal is coming through the tunnels any more." There were still some construction materials available, but "the prices increased crazily, so the owner can't afford it".Mohammed, 26, who has worked in the tunnels for almost five years, said: "We never experienced such a squeeze from the Egyptian side before." Instead of three 10-man shifts, "there are five of us working one shift. My income has dropped by a third."
According to Gisha, an Israeli NGO that monitors the movement of people and goods in and out of Gaza, the price of cement has risen 58% and gravel 50%.
Since easing its blockade of Gaza three years ago, Israel has allowed the import of food and consumer goods. But until recently the smuggling tunnels still provided for about 60% of Gaza's needs. According to a confidential study seen by the Guardian, 65% of flour, 98% of sugar and 52% of rice was smuggled.
Gazans have also been badly affected by Egypt's closure of the Rafah crossing, the main route out of Gaza, in the aftermath of the military takeover. Although the crossing was reopened on a limited basis last week, there are at least 10,000 registered people waiting to leave, according to Gisha. The daily average of exits from Gaza this month is less than a third of the daily average earlier this year.
"The closure of Rafah comes after years of blockade, which have seen an appalling decline in the conditions in Gaza, taking its brutal toll on the population, more than half of whom are children. The restrictions amount to a collective punishment which is illegal under international law," said Chris Gunness of the UN agency for refugees, Unrwa.
The Egyptian authorities have long been concerned about arms-smuggling through the tunnels, and links between militant groups in Gaza and Islamists in the Sinai desert. "Egypt is in a quandary – it doesn't want to punish Gaza by closing the tunnels, but it needs to secure Sinai," said one western diplomat.
Some diplomats would like to see Israel allow construction materials for the private sector to pass through the Kerem Shalom industrial crossing.
The UK ambassador to Israel, Matthew Gould, and the British consul-general in East Jerusalem, Vincent Fean, visited Gaza last week to meet businessmen affected by the closure of the tunnels.
• This article was amended on 20 July to reflect the fact that Israel is now allowing some construction material into Gaza
