The secret system Hamas uses to pay government salaries

Scenes like these have led to condemnation of Israeli restrictions on aid deliveries

After nearly two years of war, Hamas's military capability is severely weakened and its political leadership under intense pressure.

Yet, throughout the war Hamas has managed to continue to use a secret cash-based payment system to pay 30,000 civil servants' salaries totalling $7m (£5.3m).

The BBC has spoken to three civil servants who have confirmed they have received nearly $300 each within the last week.

It's believed they are among tens of thousands of employees who have continued to receive a maximum of just over 20% of their pre-war salary every 10 weeks.

Amid soaring inflation, the token salary - a fraction of the full amount - is causing rising resentment among the party faithful.

Severe food shortages – which aid agencies blame on Israeli restrictions - and rising cases of acute malnutrition continue in Gaza, where a kilogramme of flour in recent weeks has cost as much as $80 - an all-time high.

With no functioning banking system in Gaza, even receiving the salary is complex and at times, dangerous. Israel regularly identifies and targets Hamas salary distributors, seeking to disrupt the group's ability to govern.

Employees, from police officers to tax officials, often receive an encrypted message on their own phones or their spouses' instructing them to go to a specific location at a specific time to "meet a friend for tea".

At the meeting point, the employee is approached by a man - or occasionally a woman - who discreetly hands over a sealed envelope containing the money before vanishing without further interaction.

An employee at the Hamas Ministry of Religious Affairs, who doesn't want to give his name for safety reasons, described the dangers involved in collecting his wages.

"Every time I go to pick up my salary, I say goodbye to my wife and children. I know that I may not return," he said. "On several occasions, Israeli strikes have hit the salary distribution points. I survived one that targeted a busy market in Gaza City."

Alaa, whose name we have changed to protect his identity, is a schoolteacher employed by the Hamas-run government and the sole provider for a family of six.

"I received 1,000 shekels (about $300) in worn-out banknotes - no trader would accept them. Only 200 shekels were usable - the rest, I honestly don't know what to do with," he told the BBC.

"After two-and-a-half months of hunger, they pay us in tattered cash.

"I'm often forced to go to aid distribution points in the hope of getting some flour to feed my children. Sometimes I succeed in bringing home a little, but most of the time I fail."

In March the Israeli military said they had killed the head of Hamas's finances, Ismail Barhoum, in a strike on Nasser Hospital in Khan Younis. They accused him of channelling funds to Hamas's military wing.

It remains unclear how Hamas has managed to continue funding salary payments given the destruction of much of its administrative and financial infrastructure.

One senior Hamas employee, who served in high positions and is familiar with Hamas's financial operations, told the BBC that the group had stockpiled approximately $700m in cash and hundreds of millions of shekels in underground tunnels prior to the group's deadly 7 October 2023 attack in southern Israel, which sparked the devastating Israeli military campaign.

These were allegedly overseen directly by Hamas leader Yahya Sinwar and his brother Mohammed - both of whom have since been killed by Israeli forces.

Anger at reward for Hamas supporters

Hamas has historically relied on funding from heavy import duties and taxes imposed on Gaza's population, as well as receiving millions of dollars of support from Qatar.

The Qassam Brigades, Hamas's military wing which operates through a separate financial system, is financed mainly by Iran.

A senior official from the banned Egypt-based Muslim Brotherhood, one of the most influential Islamist organisations in the world, has said that around 10% of their budget was also directed to Hamas.

In order to generate revenue during the war, Hamas has also continued to levy taxes on traders and has sold large quantities of cigarettes at inflated prices up to 100 times their original cost. Before the war, a box of 20 cigarettes cost $5 - that has now risen to more than $170.

In addition to cash payments, Hamas has distributed food parcels to its members and their families via local emergency committees whose leadership is frequently rotated due to repeated Israeli strikes.

That has fuelled public anger, with many residents in Gaza accusing Hamas of distributing aid only to its supporters and excluding the wider population.

Israel has accused Hamas of stealing aid that has entered Gaza during the ceasefire earlier this year, something Hamas denies. However BBC sources in Gaza have said that significant quantities of aid were taken by Hamas during this time.

Nisreen Khaled, a widow left caring for three children after her husband died of cancer five years ago, told the BBC: "When the hunger worsened, my children were crying not only from pain but also from watching our Hamas-affiliated neighbours receive food parcels and sacks of flour.

"Are they not the reason for our suffering? Why didn't they secure food, water, and medicine before launching their 7 October adventure?"