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GAZA STRIP - Tens of thousands of Palestinians poured into Egypt from the Gaza Strip on Wednesday through a border wall destroyed by militants, and stocked up on food and fuel in short supply because of an Israeli blockade.
"Those people are hungry for freedom, for food and for everything," said an Egyptian shopkeeper who gave her name only as Hamida, surveying shelves emptied swiftly by Gazans paying with Egyptian pounds and Israeli shekels.
The fall of the Rafah wall punched a new hole in efforts by Israel, under frequent rocket attack from the Hamas-ruled Gaza Strip, to keep pressure on the territory in the face of an international outcry over shortages and Palestinian hardship.
The flood of people into the Egyptian part of Rafah - some on donkey carts and carrying bags and cases to fill with consumer goods - also forced Israel into a delicate diplomatic balancing act with its first Arab peace partner.
Egypt proposed that it take a new look with Israel and the Palestinian Authority at how to reactivate their border agreement, the Egyptian foreign ministry said.
Residents of Rafah, a divided town straddling the Egypt-Gaza border, said militants set off explosions that demolished a 200-metre length of the rusting, six-metre-high metal border wall put up by Israel in 2004, a year before it pulled troops and settlers from the territory.
As night fell, Palestinians, including entire families, continued to stream into the Egyptian side of Rafah. Local officials estimated at least 200,000 people crossed over in a rare opportunity to leave territory Gazans call a giant jail.
Pushing a trolley among the crowds that turned Rafah into a bazaar, Mohammed Saeed said: "I have bought everything I need for the house for months. I have bought food, cigarettes and even two gallons of diesel for my car."
Israel tightened its Gaza border closure last week, briefly halting fuel deliveries to a main power plant and cutting supplies to petrol stations, as well as humanitarian aid including food.
Israel's main ally, the United States, rallied to its defence.
"The Palestinians living in Gaza are living under chaos because of Hamas, and the blame has to be placed fully at their feet," White House spokeswoman Dana Perino said.
"It is obviously a situation that is very troubling for Israel and for good reason, it is Hamas' actions of lobbing upwards of 150 rockets a day into their territory that ... caused Israel to implement the blockade," she said.
A border terminal in Rafah, once a main avenue to the outside world for Gazans, has been largely closed since Hamas Islamists opposed to Palestinian President Mahmoud Abbas' peace efforts with Israel seized control of the Gaza Strip in June.
In Cairo, Egyptian President Hosni Mubarak said he told the security forces: "Let them come in to eat and buy food." After the Gazans did so, Mubarak said, they could go back "as long as they are not carrying weapons".
Israeli Defence Minister Ehud Barak, visiting Paris, was careful not to criticise Egypt.
"I believe that they (the Egyptians) know and will respect their role in this whole picture. I don't think that it will be helpful to add any more words to it," Barak told reporters.
Israeli criticism of Egypt's failure to curb weapons smuggling into the Gaza Strip through tunnels running under Rafah provoked and angry response from Cairo, a key supporter of US-sponsored peace talks between Israel and the Palestinians.
Israeli Prime Minister Ehud Olmert has said Israel has no intention of causing a humanitarian crisis in the Gaza Strip, but it would deny Palestinians in the territory "luxuries" so long as rocket attacks continued.
The European Union and international agencies have called the closure collective punishment on Gaza's 1.5 million people.
The Israeli army says about 250 rockets and mortars have pounded Israel since last week, amid an escalation of violence in which Israeli troops killed more than 30 Palestinians.
- REUTERS
