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Killing of Arouri Sends Menacing Message to Hamas Chiefs, May Hamper Truce Effort

Hezbollah affiliated civil defense member sprays water at a damaged site in the aftermath of what security sources said was an Israeli drone strike in Beirut's southern suburbs of Dahiyeh, Lebanon January 3, 2024. (Reuters)
Hezbollah affiliated civil defense member sprays water at a damaged site in the aftermath of what security sources said was an Israeli drone strike in Beirut's southern suburbs of Dahiyeh, Lebanon January 3, 2024. (Reuters)
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Killing of Arouri Sends Menacing Message to Hamas Chiefs, May Hamper Truce Effort

Hezbollah affiliated civil defense member sprays water at a damaged site in the aftermath of what security sources said was an Israeli drone strike in Beirut's southern suburbs of Dahiyeh, Lebanon January 3, 2024. (Reuters)
Hezbollah affiliated civil defense member sprays water at a damaged site in the aftermath of what security sources said was an Israeli drone strike in Beirut's southern suburbs of Dahiyeh, Lebanon January 3, 2024. (Reuters)

The killing of a Hamas chief in Lebanon removes a big name from Israel’s most-wanted list but could drive the Palestinian group's exiled leaders deeper into hiding, hampering efforts to negotiate further Gaza ceasefires and hostage releases.

Hamas deputy leader Saleh al-Arouri was struck down by a drone in the southern suburbs of Beirut, the stronghold of Hamas' Iranian-backed Lebanese ally Hezbollah, in an attack widely attributed to Hamas' sworn foe Israel.

Israel has not confirmed or denied a role, but the attack came a month after Israeli broadcaster Kan aired a recording of the head of Israel's domestic security agency Shin Bet vowing to hunt down Hamas in Lebanon, Türkiye and Qatar even if it took years.

On Wednesday, Israel's Mossad spy chief David Barnea said he was committed to "settling the score" with Hamas.

Arouri's killing, said Ashraf Abouelhoul, managing editor of Egypt's Al-Ahram daily and an expert in Palestinian affairs, "may push Hamas to harden its stance so it doesn’t look as if it is bowing under pressures or threats of more assassination."

The stakes are high both for the two million Palestinians trying to survive Israeli bombardment in Gaza and for Israeli hostages held there by Hamas, ruler of the coastal territory and like Hezbollah.

Hamas negotiators including Arouri had been in Qatar-mediated talks with Israel over a possible further ceasefire in the war and prospects for further releases of Israeli hostages.

As recently as the past week the two sides were having discussions with Qatari mediators on a truce and hostages, a source familiar with the talks said, indicating a period when the Arouri strike may have been in final stages of preparation.

Security concerns may now complicate matters, analysts said.

Mohanad Hage Ali, deputy director for research at the Malcolm H. Kerr Carnegie Middle East Center in Beirut, said that in recent years Palestinian groups operating in Lebanon, where Hezbollah is a powerful player, had become used to a measure of security. Hamas needed to be far more cautious now, he added.

'Open battle’

Such groups, he said, had been "happy with the arrangements in place – some quiet and stability and some sort of deterrence by Hezbollah. This has flown out of the window, given Oct. 7 and the conflict in south Lebanon and how things are going forward."

Arouri, 57, was the first senior Hamas political leader to be assassinated outside the Palestinian territories since Israel vowed to eliminate the group following its Oct.7 rampage, when it killed 1,200 people and took 240 hostages back to Gaza.

The loss of a top figure could now prompt Hamas to take a tougher line against Israel, currently waging a shattering air and ground offensive against the group, analysts told Reuters.

The extent of any change in Hamas' stance remains unclear.

Hussam Badran, a Hamas political leader in exile, reacted defiantly to Arouri's death by saying: "We tell the criminal occupation (Israel) that the battle between us and them is open.”

However, Hamas official Sami Abu Zuhri said that while Arouri's death "will have its consequences", Hamas' position remained that provided Israel fully stopped its attacks then the group would be open to talks "on all other issues".

Arouri's assassination may also widen the Gaza war to new territory in Lebanon, marking the first strike on Beirut after nearly three months of cross-border shelling between Hezbollah and Israel that had been limited to southern Lebanon.

Hezbollah will come under pressure to exact revenge for its ally, especially since he was killed in the group's Beirut stronghold Dahiyeh, the analysts said.

Three Iranian insiders closely connected to Tehran's hardline clerical establishment said the killing had raised concerns among Iranian leaders that Israel could be trying to widen the conflict by dragging in Iran.

"His assassination shocked everyone in Tehran. However, it does not mean that Tehran will get involved in the conflict directly, though apparently this is the main goal of the Zionist regime's leaders," said one of the insiders.

Within hours of the killing, however, an Israeli official signaled Israel wanted to avoid escalation, even as he insisted Israel had not taken responsibility for the attack.

Caution in Lebanon

Speaking to MSNBC, the official, Mark Regev, an adviser to Israeli Prime minister Benjamin Netanyahu, described the attack as a "surgical strike against the Hamas leadership" and not an attack on the Lebanese state or Hezbollah.

Whatever its eventual impact on regional stability, Arouri's death is highly likely to make other Hamas leaders more cautious about their whereabouts. In Gaza, no Hamas leader has been seen since the Oct. 7 killing spree. Many are believed to be hiding in deep underground tunnels.

For decades, the long arm of Israel's Mossad intelligence service has encouraged Palestinian opponents to live in the shadows to avoid assassination.

Israel's responded to the 1972 killing of 11 Israeli Olympic team members at the Munich games with an assassination campaign against operatives and organizers of the Black September Palestinian group over several years and in several countries.

Hamas leader Khaled Meshaal survived a 1997 assassination attempt by Israeli Mossad agents in Jordan.

In Lebanon, some Hamas officials have appeared regularly in recent months to deliver press statements. But Arouri and others more involved in strategic affairs have avoided the limelight.

Hamas leaders Ismail Haniyeh and Khaled Meshaal are expected to stay in Türkiye, a heavyweight regional power, and Qatar, an active diplomatic player, two countries Israel will not want to antagonize.

Türkiye has repeatedly warned Israel to stay away from Hamas members on Turkish soil. On Tuesday, before Arouri's killing, Turkish authorities detained 34 people suspected of links to Mossad and of planning to attack Palestinians living in Türkiye.

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To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
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To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)

Cash is the lifeblood of the Gaza Strip’s shattered economy, and like all other necessities in this war-torn territory — food, fuel, medicine — it is in extremely short supply.

With nearly every bank branch and ATM inoperable, people have become reliant on an unrestrained network of powerful cash brokers to get money for daily expenses and commissions on those transactions have soared to about 40%.

"The people are crying blood because of this," said Ayman al-Dahdouh, a school director living in Gaza City. "It’s suffocating us, starving us."

At a time of surging inflation, high unemployment and dwindling savings, the scarcity of cash has magnified the financial squeeze on families — some of whom have begun to sell their possessions to buy essential goods.

The cash that is available has even lost some of its luster. Palestinians use the Israeli currency, the shekel, for most transactions. Yet with Israel no longer resupplying the territory with newly printed bank notes, merchants are increasingly reluctant to accept frayed bills.

Gaza’s punishing cash crunch has several root causes, experts say.

To curtail Hamas’ ability to purchase weapons and pay its fighters, Israel stopped allowing cash to enter Gaza at the start of the war. Around the same time, many wealthy families in Gaza withdrew their money from banks and then fled the territory. And rising fears about Gaza’s financial system prompted foreign businesses selling goods into the territory to demand cash payments.

As Gaza’s money supply dwindled and civilians’ desperation mounted, cash brokers' commissions — around 5% at the start of the war — skyrocketed.

Someone needing cash transfers money electronically to a broker and moments later is handed a fraction of that amount in bills. Many brokers openly advertise their services, while others are more secretive. Some grocers and retailers have also begun exchanging cash for their customers.

"If I need $60, I need to transfer $100," said Mohammed Basheer al-Farra, who lives in southern Gaza after being displaced from Khan Younis. "This is the only way we can buy essentials, like flour and sugar. We lose nearly half of our money just to be able to spend it."

In 2024, inflation in Gaza surged by 230%, according to the World Bank. It dropped slightly during the ceasefire that began in January, only to shoot up again after Israel backed out of the truce in March.

Cash touches every aspect of life in Gaza

About 80% of people in Gaza were unemployed at the end of 2024, according to the World Bank, and the figure is likely higher now. Those with jobs are mostly paid by direct deposits into their bank accounts.

But "when you want to buy vegetables, food, water, medication -- if you want to take transportation, or you need a blanket, or anything — you must use cash," al-Dahdouh said.

Shahid Ajjour’s family has been living off of savings for two years after the pharmacy and another business they owned were ruined by the war.

"We had to sell everything just to get cash," said Ajjour, who sold her gold to buy flour and canned beans. The family of eight spends the equivalent of $12 every two days on flour; before the war, that cost less than $4.

Sugar is very expensive, costing the equivalent of $80-$100 per kilogram (2.2 pounds), multiple people said; before the war, that cost less than $2.

Gasoline is about $25 a liter, or roughly $95 a gallon, when paying the lower, cash price.

Bills are worn and unusable

The bills in Gaza are tattered after 21 months of war.

Money is so fragile, it feels as if it is going to melt in your hands, said Mohammed al-Awini, who lives in a tent camp in southern Gaza.

Small business owners said they were under pressure to ask customers for undamaged cash because their suppliers demand pristine bills from them.

Thaeir Suhwayl, a flour merchant in Deir al-Balah, said his suppliers recently demanded he pay them only with brand new 200-shekel ($60) bank notes, which he said are rare. Most civilians pay him with 20-shekel ($6) notes that are often in poor condition.

On a recent visit to the market, Ajjour transferred the shekel equivalent of around $100 to a cash broker and received around $50 in return. But when she tried to buy some household supplies from a merchant, she was turned away because the bills weren’t in good condition.

"So the worth of your $50 is zero in the end," she said.

This problem has given rise to a new business in Gaza: money repair. It costs between 3 and 10 shekels ($1-$3) to mend old bank notes. But even cash repaired with tape or other means is sometimes rejected.

People are at the mercy of cash brokers

After most of the banks closed in the early days of the war, those with large reserves of cash suddenly had immense power.

"People are at their mercy," said Mahmoud Aqel, who has been displaced from his home in southern Gaza. "No one can stop them."

The war makes it impossible to regulate market prices and exchange rates, said Dalia Alazzeh, an expert in finance and accounting at the University of the West of Scotland. "Nobody can physically monitor what’s happening," Alazzeh said.

A year ago, the Palestine Monetary Authority, the equivalent of a central bank for Gaza and the West Bank, sought to ease the crisis by introducing a digital payment system known as Iburaq. It attracted half a million users, or a quarter of the population, according to the World Bank, but was ultimately undermined by merchants insisting on cash.

Israel sought to ramp up financial pressure on Hamas earlier this year by tightening the distribution of humanitarian aid, which it said was routinely siphoned off by militants and then resold.

Experts said it is unclear if the cash brokers’ activities benefit Hamas, as some Israeli analysts claim.

The war has made it more difficult to determine who is behind all sorts of economic activity in the territory, said Omar Shabaan, director of Palthink for Strategic Studies, a Gaza-based think tank.

"It's a dark place now. You don't know who is bringing cigarettes into Gaza," he said, giving just one example. "It's like a mafia."

These same deep-pocketed traders are likely the ones running cash brokerages, and selling basic foodstuffs, he said. "They benefit by imposing these commissions," he said.

Once families run out of cash, they are forced to turn to humanitarian aid.

Al-Farra said that is what prompted him to begin seeking food at an aid distribution center, where it is common for Palestinians to jostle over one other for sacks of flour and boxes of pasta.

"This is the only way I can feed my family," he said.