KEREM SHALOM CROSSING, Israel: Each day, dozens of trucks move food, consumer products and industrial materials into the Gaza Strip at this heavily fortified crossing, in an odd arrangement that has turned Israel into a key supplier to a territory governed by its bitter enemy Hamas.
Despite frequent fighting along this volatile border, business at the Kerem Shalom crossing has picked up greatly over the past year and a half, though it remains a fraction of historical standards. Israel says it plans a further expansion here by mid-2012.
The activity here shows how the fates of Gaza and Israel remain intertwined, six years after Israel withdrew its troops and settlers from the seaside strip.
Kerem Shalom - the sole cargo passage into Gaza - is an economic lifeline for the territory's impoverished 1.6 million people, providing the vast majority of consumer goods.
For Israel, it is a key tool in maintaining a tense truce that has largely held up since a devastating Israeli military offensive in Gaza three years ago. With clashes regularly taking place along the volatile border, critics also accuse Israel of using commerce to control and even punish the area.
Kamil Abu Rukun, the senior Israeli Defense Ministry official who oversees all of the country's border crossings with the Palestinians, rejected such notions. He said the development of the cargo terminal is a shared Israeli and Palestinian interest, and that security concerns are the main factor limiting trade.
"These people have been connected to us for many years, with economic and business ties," he said. "For humane and humanitarian reasons, we think we must let them get what they need."
Increased prosperity in Gaza could also reduce militant activity, he said. "I believe that people who can make a decent living think about making a living and not about other things," he said.
This thinking represents a dramatic, if reluctant, turnabout by Israel, which along with Egypt clamped a tight blockade on Gaza after Hamas overran the area in June 2007. The blockade was meant to weaken Hamas, but didn't.
While the embargo crippled parts of Gaza's economy, Hamas deepened its control, in part by smuggling goods and weapons through hundreds of tunnels under the border with Egypt that continue to thrive.
Israel changed its policy toward Gaza after a deadly June 2010 raid on an international flotilla trying to bust the blockade. Under heavy criticism, Israel lifted all restrictions on consumer goods, though it kept a ban on materials like cement and metals that it says could be used by Hamas to build fortifications or aid attacks on Israel.
In the meantime, Israel has closed three other cargo crossings into Gaza and consolidated all operations at the expanded Kerem Shalom facility.
Today, about 4,500 truckloads of goods go into Gaza each month. That's higher than 2,500 truckloads before the flotilla raid, according to military and U.N. figures, but well below 2005 levels averaging 10,400 truckloads at all crossings each month. Truckloads out of Gaza are minimal; Israel says that's because it has to do even more stringent checks on outgoing traffic to prevent explosives from slipping into Israel.
Abu Rukun said that new equipment and technology will boost the flow of goods into Gaza by about 50 percent from current levels by mid-2012. He also expects exports to begin flowing more freely out of Gaza at that time.
Israeli officials say they are working on ways to boost the flow of construction materials into Gaza, and considering allowing exports to Israel and the West Bank. In the meantime, the tunnels are feverishly bringing in building materials for private use.
Hamas officials say they welcome the prospect of increased trade, but they note trade remains a fraction of what it used to be, and suspect Israel has ulterior motives.
The consolidation of operations through one crossing allows Israel to "tighten the siege on the Gaza Strip any time it wants," said Fawzi Barhoum, a senior Hamas official.
The lone crossing between Egypt and Gaza does not handle cargo.
Israeli officials say all limitations on trade are purely the result of security concerns.
These concerns are evident in the unconventional arrangement at Kerem Shalom, a sprawling maze of courtyards surrounded by huge concrete slabs. Israeli security men are on the premises, and there is no direct contact between Israeli and Palestinian officials.
The crates of cargo - anything from fruits and vegetables to refrigerators, construction materials and fuel - are inspected on the Israeli side, then placed on "sterile" trucks that are never allowed out of the crossing.
Palestinian drivers from Gaza with special security clearance then drive the trucks 500 yards (meters) to the Gaza border, where the goods are transferred to Palestinian trucks. All trade is ostensibly between private parties, though all trucks pass Hamas security and customs checks on the other side of the border.
The process at Kerem Shalom is inefficient, slowed by the security checks. Situated at the meeting place of the Israeli, Egyptian and Gazan borders, the crossing has frequently been closed because of attacks by Palestinian militants. In April 2008, multiple assaults included a twin car bombing that wounded 13 soldiers.
"There is no simple solution to a complex problem, and these problems are very complex," Israeli Defense Ministry director Udi Shani told The Associated Press.
Critics, however, say Israel could be doing much more to boost traffic. They suggest that politics, not just security, are driving the decision making.
Sari Bashi, director of Gisha, an Israeli advocacy group critical of the blockade, said Israel has systematically worked to depress the Gaza economy and punish Hamas.
She said traffic into Gaza remains just 40 percent of what it was before the Hamas takeover, and exports are just 1 percent. Construction materials, badly needed to rebuild destruction from the Israeli military offensive, are restricted to projects coordinated by the U.N. and other international bodies.
In addition, exports are prohibited from going to traditional markets in Israel and the West Bank, and instead, items must be shipped to Europe, where demand is low. This has further divided Gaza and the West Bank, territories where the Palestinians hope to establish an independent state alongside Israel.
"It's a political decision that is devastating for the health and well-being of Palestinian society, and it destroys the possibility of a two-state solution," Bashi said.