* Egypt, Israel choke tunnel business in Gaza - workers
* Tunnel worker says income 25 pct of previous level
* Egyptians make $18,000 a month supplying Gaza-official
By Nidal al-Mughrabi
RAFAH, Gaza Strip, Nov 19 (Reuters) - Fearing loss of life and money, Palestinians are abandoning tunnels that supply the blockaded Gaza Strip with everything from food to fridges to weapons.
On the Gaza side of the border with Egypt, there is little activity in an area that was once as busy as an industrial zone.
Many tunnel workers have concluded that the risk of being buried alive by Israeli bombardment and accidental ground collapses or poisoned by gas pumped underground by Egyptian security forces is just not worth it. Around 100 people have been killed in the past year.
"Most of the people closed their tunnels and left," said Abu Mohammed, a tunnel builder who declined to give his full name and covered his face with a red and white Arab headdress.
The number of tunnels that had reached 3,000 a year ago before a three-week Israeli military offensive now stands at several hundred. Of those, workers said just 150 are functional.
It is unknown how many weapons tunnels are functioning.
Highlighting the risks faced by the tunnellers, Israeli warplanes carried out two strikes along the border with Egypt on Thursday, wounding three workers, medical workers said.
"The situation is very bad. The Egyptians and the Israelis stepped up their campaign," Abu Mohammed said. "Israel bombards from air. Egypt either pumps gases that kill people, pours water or detonates explosives to destroy the tunnels," he said.
The tunnels, some of which have existed for decades, have become a vital supply artery for Gaza since 2006 when Israel began to restrict the flow of goods into the enclave after the Hamas Islamist group won a legislative election.
With Egyptian help, the blockade was tightened in 2007 when Hamas, which does not recognise Israel’s right to exist, seized control of Gaza.
Ahead of the Muslim Eid al-Adha festival later this month, the remaining tunnels have been bringing cattle into Gaza ready for slaughter. Forty animals were brought through the tunnels overnight, workers at one tunnel said.
Though Israel has allowed thousands of cattle into Gaza for the holiday, the tunnel workers said there was still demand for the hundreds they were supplying from Egypt.
Food, electrical goods and even cars, sliced into four parts and reassembled in Gaza, have been brought through the tunnels. They have also been an important supply route for construction materials restricted by the blockade.
Israel restricts the entry of materials it says could be used for military purposes by Hamas. It launched the offensive with the stated aim of halting rocket fire from Gaza and says militant groups there use the tunnels to supply weapons.
Hamas has a visible presence in the tunnelling zone, but only to register workers’ complaints against their employers and to prevent the smuggling of drugs and weapons by regular tunnellers. Operators are required to pay compensation of $7,000 to the families of workers killed in the tunnels.
Hamas and other militant factions are believed to have their own tunnels through which they bring their supply of arms.
The sound of generators indicates where the remaining tunnels are still operating. Plastic sheeting covers the mouths of abandoned tunnels. Workers are hesitant to speak to the media, fearing that their tunnels may be located by Israel.
Abu Mohammed, 30, has been in the business for two years and says it has never been this bad. His daily income has fallen to 100 shekels ($26) from four times that amount a year ago.
"Goods are not coming like before, our income is low but we have no other choice and no other way to earn money," he said.
Tunnels now have to reach deeper into Egypt to make it harder for the security forces there to locate them, he said. An Egyptian official said the tunnels are closed as soon as they are uncovered.
Egyptians involved in smuggling goods to Gaza from Sinai have been making profit of at least $18,000 a month, said Mohamed Hussein, head of the North Sinai Food Supplies Police.
Most of the goods taken into Gaza this year have been cement and food, while last year fuel was the main export, he said.
Despite the hardships, Abu Mohammed said it would be difficult for Egypt and Israel to cut off the tunnel supply network altogether. "They are choking us but not yet throttling us to death," he said. (Additional reporting by Yasmine Saleh in Cairo and Yusri Mohamed in Ismailia; Editing by Tom Perry))