With Israel tightening restrictions and targeting key operatives, Hamas is struggling to pay its fighters and government workers in Gaza, according to a Wall Street Journal report.
Last month, Israel halted the entry of humanitarian goods into the enclave. According to Arab, Israeli, and Western officials, Hamas had been diverting some of these supplies and selling them to raise funds.
Israeli airstrikes have also killed or forced into hiding many Hamas officials responsible for distributing cash.
The result was a severe financial squeeze. Most Gaza government employees haven't been paid, and Hamas fighters are now receiving only half their usual monthly salaries - around $200-$300, according to Arab intelligence sources.
"Even if they sit on large amounts of cash, their ability to distribute it would be very limited right now," said Eyal Ofer, a researcher tracking Gaza's economy. Traditional methods like couriers or distribution points are now easily targeted by Israeli forces.
Before the war, Hamas used to receive $15 million a month from Qatar. It also raised funds from abroad - including West Africa, South Asia, and the UK - with an estimated $500 million stockpile, much of it held in Turkey. But the war changed that.
After October 2023, Israel cracked down on the physical movement of cash into Gaza. Hamas then tapped into local banks and used humanitarian and commercial supply routes to create new income streams - taxing merchants, collecting customs, and reselling aid goods. Those pathways were closed again in March, worsening the crisis.
"There is a big crisis in Hamas in terms of getting the money," said Moumen Al-Natour, a lawyer and Hamas critic in Gaza. "They were mainly dependent on humanitarian aid sold in black markets for cash."
During a brief ceasefire earlier this year, Hamas distributed salaries in cash or goods through fixed points. After Israel resumed strikes in March, the group switched to informal handoffs - further slowing down payments and weakening internal unity.
The shortage is hitting civilians hard. With shekels being Gaza's main currency, people now face severe hurdles just to buy food or medicine. Gaza hasn't received fresh currency in over 18 months. Most banks and ATMs have been destroyed.
To cope, some Gazans now rely on money sent from relatives abroad. Converting digital payments into cash comes at a cost - over 20 per cent in commission, say officials. There's even a rise in "money repair" shops, where torn and worn-out bills are patched with tape and reused.
Aid groups warn that the Israeli blockade could lead to starvation in Gaza. Israeli officials argue that cutting off aid weakens Hamas's grip. Israel's Defence Minister Israel Katz said plans are underway to deliver aid through civilian channels instead.
Experts estimate around $3 billion in cash may still circulate in Gaza, but getting access to it has become nearly impossible.
