In war-ravaged Gaza, it’s no business, as usual

In the Karni Industrial Zone on Gaza’s eastern edge, the Maatouq factory churned out big plastic tubs of ice cream that made their way to the company’s five stores sprinkled throughout the city. Just behind the plant, the Harir factory made its own contribution to compulsive snacking by cranking out salted potato chips, which could be washed down with one of the hundreds of thousands of bottles of Coca-Cola manufactured and stored nearby.

Those businesses are now mostly scorched husks of singed metal and melted plastic, casualties of the latest bout of violence last month that pitted Israel against Hamas, the Palestinian militant group that rules over this Mediterranean wedge of territory between Israel and Egypt.

The sights and sounds of active combat are absent now in Gaza, with a May 21 truce still holding.

While life has quickly returned to normal in Israel, the business owners in this industrial zone — once billed as a showcase project designed to strengthen Israeli-Palestinian ties — and in Gaza at large see little hope for a swift recovery.

The 11-day war killed more than 250 people in Gaza and 13 in Israel. During the fighting, Hamas fired more than 4,000 rockets, the majority of which were intercepted by Israel’s Iron Dome missile-defense system; those that got through damaged 1,325 buildings, Israeli media reported.

For its part, the Israeli military said its air and artillery strikes on Gaza hit more than 1,500 targets, a wave of devastation that has left hundreds of buildings as well as more than 1,800 commercial units destroyed or damaged, according to initial estimates from the economy and public works ministries in Gaza.

That is fewer than the approximately 6,500 commercial units partially or completely destroyed over 50 days in the 2014 confrontation between Hamas and Israel. But Gaza was already reeling from the compound effects of the COVID-19 pandemic and the stringent blockade imposed by Egypt and Israel after Hamas took power in the territory in 2007. Now, fully 70% of the enclave’s 2 million people are struggling with food insecurity and require assistance, World Food Program officials say. Unemployment hovers around 69%.

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Coming on top of all that, the war’s disastrous impact on Gaza’s business community, with Israeli assaults reducing entire commercial towers to rubble and chopping up major commercial thoroughfares, is so great that recovery will be harder than ever. Trade has been disrupted just when it’s needed most.

Israel blames Hamas for embedding its bases and infrastructure near civilian areas. Even so, in the past, Israeli forces spared areas like the Karni Industrial Zone, said Wadee Masry, who heads PADICO Holding, the company involved in creating the zone. Indeed, that formed part of the attraction for businesses to move there. Before, even if Hamas fighters snuck in, the Israeli side would communicate with the business owners, who made Hamas pull the fighters back without firing a shot, Masry said.

“This was supposed to be a safe area. According to Oslo, the industrial zones at the border should be outside any equation,” Masry said, referring to the Israeli-Palestinian peace accords negotiated in the Norwegian capital in the 1990s.

“But this time it was a
message, I believe, that there would be no red lines.”

Mohammad Ghazali, the 65-year-old owner of Maatouq Ice Cream, moved his factory from the upscale Al-Rimal neighborhood to the Karni zone because it provided reliable electricity and security.

Three years ago, “there was nothing but four walls here,” he said of the warehouse, which sits a few hundred yards from the border fence with Israel. He soon filled it with equipment, including churning machines for making ice cream and rollers for toasting pistachios, almonds and peanuts for sprinkling.

At 4 a.m. on May 17, Ghazali received word of a fire in his factory sparked by an Israeli attack nearby. Flames had already devoured whatever was in the factory by the time he and family members arrived.

Oxygen tanks used for freezing blew up; plastic rolls melted. Ghazali couldn’t check if a dust-blackened mixer still worked because the wiring had melted and short-circuited the power supply.

Stepping through the charred remains of his factory, he heaved open the door of a walk-in freezer, then recoiled from the sickly sweet miasma of burned plastic, explosive material and the 14 flavors of ice cream — a strange jumble of banana, chocolate and passion fruit, among others — his factory used to produce.

“I want to understand why. Why did Israel do this?” Ghazali said. “They had no bank of targets, so they just struck the economy. It was just to humiliate us.”

On Rimal Street, the Al Shorouq tower and its environs were home to dozens of smaller businesses, including Mutaz Khaled Ismail’s dental clinic. Believing in the power of location, the 27-year-old Egyptian university graduate bought an office unit in Hasniya, the building adjacent to Al Shorouq.

“I watched missiles bring down the first two parts of Shorouq. Then I went to take a shower, came back and saw the middle was destroyed,” he said.

When Al Shorouq collapsed, it sheared off the wall of the Hasniya building, like a knife cutting through a layer cake. Ismail thought of the brand-new 600-pound dentist’s chair he had bought and would never use.

“I took a risk, and now the war destroyed everything,” he said. “I don’t know if I’ll stay or not. I think I’ll have to leave. In any case, people have no money. Why should I sacrifice myself?”

There are also longer-term effects. Before the war, the quartet of companies run by the Khdeir family was set to provide some 40% of the fertilizer, pesticides and other farming supplies for local farmers. Their warehouses, set in a large dirt yard in Atatra, in the northern part of the strip, were now a horror show of toxic pink goop, still-smoking piles of refuse and an evil-looking ooze pool. The smell was nauseating.

“It’s too expensive for us to do this — the agricultural ministry has to clean this up. We have no solution for it,” said Suhail Khdeir, head of the Midor company, which works in agricultural projects. He added that some parts of the site had begun to spew smoke again overnight.

“Thirty-five years we’ve been doing this. It went in an instant. And there’s no way we can do anything to help anyone at this point,” he said.

Standing nearby was Adham Basyooni, a spokesman for the agricultural ministry, who said the materials damaged here had been allowed in by Israel in the first place.

“There’s simply nothing here that is dual use,” he said, meaning that none of the materials could be used for military purposes. “The Israelis targeted this place specifically. It makes you wonder why. This must be economic punishment and environmental destruction.”

Questions on how to rebuild Gaza center on how to break the Sisyphean cycle of recovery and destruction while ensuring that no aid benefits Hamas. Hamas refuses to recognize Israel’s right to exist and is considered a terrorist group by the U.S., Israel and other Western nations.

“Hamas is a terrorist organization — we’ve recognized that,” President Biden said after the cease-fire deal last month. “But that doesn’t mean we should not be in Gaza, rebuilding Gaza for all those innocent people who in fact have been hurt and had been collateral damage, including loss of homes and a whole range of other things.”

At a news conference late last month, Hamas’ political head in Gaza, Yahya Sinwar, said the group had sufficient financial resources from Iran and various donors and had no need to touch any of the aid money.

“We will make the task easier for everyone,” he said, “and we will make sure that the process is transparent and fair, and let everyone be sure that no penny [from reconstruction funds] will go to Hamas.”

Egypt, which was instrumental in brokering the cease-fire, has taken the lead, with its officials engaging in shuttle diplomacy not just between Hamas and its adversary, Israel, but also between Hamas and its political rival, the internationally recognized Palestinian Authority, which controls parts of the Israeli-occupied West Bank.

This week, dozens of Egyptian trucks bearing aid containers entered Gaza, and Cairo has already pledged $500 million for reconstruction, with Egyptian firms expected to take part. That would require at least a partial lifting of the blockade, and would allow Egypt to monitor where materials were being used.

Right now, entry of construction materials is restricted by the Gaza Reconstruction Mechanism, a temporary United Nations-brokered agreement between the Palestinian Authority and Israel in 2014. The mechanism allows Israel to work with the U.N. in supervising the entry of construction materials and ensuring “they reach their intended destination,” according to the Israeli Ministry of Defense. But critics say the conditions are too onerous and have effectively hobbled previous reconstruction efforts.

Hamas officials insist that the blockade must be fully lifted for the cease-fire to become permanent.

“If this happens, then calm and stability could return,” Khalil Haya, a top Hamas official, told reporters late last month.

It can’t come fast enough for Ibrahim Hassouneh, who heads the Siksek plastic pipe factory. He estimates that he has lost some $1 million as a result of the war, including what one factory executive said was 350 tons of raw materials burned in the Israeli attacks.

“Now we can’t export or import. There’s been no mention as to when the crossing might reopen,” Hassouneh said, referring to the Kerem Shalom crossing between Gaza and Israel, which normally allows a limited amount of goods to flow through.

Hassouneh added that he would normally export 25 tons of his products to the West Bank on top of fulfilling Gaza’s own demand. At the moment, that’s literally a pipe dream.

“I can’t fulfill any of my orders now,” he said.

Bulos is a Times staff writer and Salah a special correspondent.

This story originally appeared in Los Angeles Times.