By: Fern Sidman

As Israel continues its sweeping military campaign against Hamas in the Gaza Strip, the terrorist organization is now facing what appears to be its most severe financial crisis in years. According to a detailed report published by The Wall Street Journal and cited by The Jewish News Syndicate (JNS), Hamas is now struggling to meet even its basic payroll obligations, while its traditional income streams have been decimated by Israeli military pressure and international sanctions.

As JNS reported, Hamas’s financial infrastructure, long sustained through a combination of illicit taxation, aid diversion, smuggling, and black-market manipulation, is now under immense strain. According to Moumen al-Natour, a lawyer based in Gaza’s Al-Shati refugee camp, “They [Hamas] have a big crisis on their hands. They were mainly dependent on humanitarian aid sold in black markets for cash.”

Hamas, which the United States, European Union, and Israel designate as a terrorist organization, has historically exploited humanitarian aid flowing into Gaza—seizing supplies, reselling them for profit, and taxing merchants at checkpoints. That system, however, has been substantially degraded by the Israeli campaign, which has deliberately targeted Hamas operatives responsible for the movement and disbursement of funds.

The JNS report noted that Israeli airstrikes have focused specifically on Hamas officials known to handle cash transfers, forcing them into hiding and interrupting the internal flow of funds.

The economic collapse has translated directly into payroll failures across Hamas’s organizational hierarchy. According to the WSJ and JNS, senior Hamas officials and fighters are now receiving only a fraction of their former salaries. Rank-and-file terrorists are reportedly being paid just $200 to $300 per month, while many administrative and support staff within the Hamas-run Gaza bureaucracy have ceased receiving salaries altogether.

This disruption in income is creating discontent within the ranks of Hamas and is reportedly hampering recruitment. Hamas, which relies heavily on maintaining local loyalty and projecting power through financial patronage, is now facing a growing backlash from some Gazans who view the group as responsible for their suffering.

As JNS reported, there have even been instances of civil unrest and public protests against Hamas, an increasingly rare and dangerous development within the tightly controlled enclave.

Despite the crisis, Hamas is not entirely without financial reserves. According to Western and Arab estimates cited by JNS, the group is believed to have stashed up to $500 million abroad, with much of the money originating from Qatar and other sympathetic regimes.

However, Gaza faces an acute shortage of physical cash. With Israel’s central bank halting the delivery of new bills into the territory, and bank infrastructure largely destroyed by airstrikes, everyday economic activity has slowed to a crawl. The JNS report noted that many residents have resorted to using “money repair shops” to tape together tattered currency, reflecting the depths of Gaza’s financial dysfunction.

Estimates of the remaining money still circulating in Gaza vary. One analyst told the WSJ there could be as much as $3 billion, though the lack of banking records makes it impossible to verify.

Israeli Defense Minister Israel Katz made it clear that Israel’s current strategy goes beyond military operations—it includes economic tools to dismantle Hamas’s grip on Gaza. As quoted by JNS, Katz said that humanitarian aid deliveries would resume, but only through civilian companies, thereby bypassing Hamas entirely.

“Stopping humanitarian aid undermines Hamas’s control over the population,” Katz stated, underscoring a broader effort to sever the group’s ability to leverage aid for political and military gain.

In January, a brief ceasefire allowed for increased aid into Gaza, providing Hamas with a temporary economic reprieve. However, when hostilities resumed in March, Israel reinstated strict controls on goods and financial flows, further compounding Hamas’s financial troubles.

While international mediators continue pushing for a new ceasefire deal—one that would potentially include the release of Israeli hostages—negotiations remain stalled. Hamas is demanding a complete end to the war, while Israel insists that military operations will continue until Hamas is decisively defeated.

The JNS report emphasized that this deadlock places Hamas in an increasingly desperate position: militarily pressured, economically constrained, and politically isolated. The once-powerful militant group now faces mounting internal and external challenges that threaten to undermine its authority and operational capabilities.

The financial unraveling of Hamas represents a significant development in the broader Israeli strategy to dismantle the group’s operational infrastructure. As JNS has consistently reported, the combination of targeted military action and economic strangulation is having a tangible impact—not just on Hamas’s ability to wage war, but also on its ability to govern, recruit, and maintain loyalty within Gaza.

With Hamas’s financial lifelines collapsing, its battlefield options narrowing, and its public support waning, Israel may be closer than ever to achieving one of its long-standing objectives: breaking the backbone of Hamas’s rule over Gaza.