The three-week Israeli offensive has failed to disrupt the flow of weapons through the tunnels that crisscross the border between Egypt and the Gaza Strip, smugglers told The Times yesterday.

“We have continued to move goods. Most of our tunnels are still intact,” said Khaled, a smuggler on the Egyptian side of the border.

Standing just outside the Rafah crossing, Khaled gestured towards the vast fields just outside the “no man’s land” – a demarcated zone between Egypt and the Gaza Strip. He estimated that there were nearly a thousand tunnels hidden in the dusty hills, more than half of them used to import oil and gas and the rest for goods.

A handful, described as VIP tunnels, are big enough to walk through.

“It costs $200,000 to build some of those. There is a lot of money here,” he said. Weapons and goods have been smuggled through the Egyptian border for years, but the tunnel-building industry really took off when Hamas seized control of Gaza in June 2007 and Israel imposed a blockade on the coastal strip.

Since then, Israel has proposed a number of methods to shut down smuggling routes, including building a moat, an underground wall or a sensor system along the border. One of the main aims of the Israeli offensive this month was to destroy Hamas’s capacity to bring rockets and other weapons into the territory.

The smugglers work to order, ready to deliver whatever the militants demand. In recent months, Khaled has noticed an increase in Kalash-nikov rifles, shipped in from African countries such as Eritrea and Somalia.

“They are also trying to bring in parts for longer-range missiles. In another six months I think they could have them,” he said.

Khaled described a complex system, complete with mid-point “terminal”, by which the delivery of goods is organised. At a designated spot, Egyptian smugglers hand over their goods to their Palestinian counterparts.

The system has a price list – $1,000 per person brought in, $30 per kilo of goods – and a tariff system by which a certain percentage goes to the clans that keep watch. Border guards, bribed to look the other way, also take a cut of the profits.

“If the Egyptian Government wanted to stop the tunnels they could. The Egyptian Government gets money from the tunnels . . . There are thousands of ideas to stop the tunnels but the only way to stop them is to open the border,” Khaled said.

Residents in Rafah confirmed that Israeli deep-penetration bombs had put most tunnels out of commission, but some were operating again. “I saw them bring up fuel from one of the tunnels which is still working,” said a Rafah resident. Another described how a shipment of paraffin stoves was smuggled in on Sunday.

Ehud Olmert, the Israeli Prime Minister, agreed to a ceasefire only after the United States signed an accord to help to stop arms smuggling in Gaza. Military officials added that taking out the tunnels had been a “top priority” and claimed that at least 80 per cent had been destroyed.

Egyptian smugglers said that the figure was closer to 40-60 per cent, but claimed that the damage done was largely reparable. Each tunnel was built with three heads, Khaled said. When an Israeli airstrike struck one opening, the smugglers would simply use a different one until they could repair the damage.

Danny Ayalon, a former Israeli Ambassador to the US, said that Egypt had long lacked the political will to crackdown on the smugglers. “It’s about changing the entire attitude, whereby you do enforcement in a very intensive and aggressive way, which we have not seen yet,” he said. A number of countries have pledged to help the Egyptians to stop smuggling, including the US, which allocated $23million to train Egyptian troops.

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