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• Hamas Funds Gaza With Taxes, `Islamic Friends' Help (Update1) 

Hamas, the party that rules the Gaza Strip and launches rockets at Israel, has a message for its Palestinian residents: Thank you for smoking. Cigarette taxes are among the few sources of income Hamas has left. . . .

So Gaza's government is funding its schools, bureaucracy and rocket-launchers from other sources, including fees on auto license plates, birth certificates and the like; taxes on smuggled cigarettes and other items that get through the blockade; and aid from Islamic and Arab allies. . . .

Hamas also receives funds from Islamic charities in other countries, via Gaza banks it controls or through underground tunnels from Egypt to the border town of Rafah. . . .

The tunnels provide revenue in other ways. Cigarettes smuggled through them are taxed -- $3 a pack, increasing the price to $5.

``Hamas tax collectors chase around smugglers,'' said Ziad Al-Aloul, 37, who holds the franchise for importing the Lucky Strike brand into Gaza. ``Legal importers like us can't get cigarettes in because, even without the siege, if Hamas tried to tax them, Israel would block the imports'' of tobacco.

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