In a coordinated effort using explosives and bulldozers, militants in the Gaza Strip pulled down much of a seven-mile border fence with Egypt Wednesday, allowing tens of thousands of Gazans to cross into Egypt to buy everything from fuel to baby formula.

The breach, which Egyptian security forces did nothing to contain on President Hosni Mubarak's orders, is the biggest challenge yet to Israel's seven-month-old economic blockade of the Gaza Strip and a major challenge to Israeli, US, and Egyptian efforts to weaken Hamas, which seized control of Gaza last June. A UN official estimated that more than 200,000 people crossed the border Wednesday.

The secular Egyptian government would like as much as Israel to see Hamas isolated and weakened – the Islamist movement is an ally of Egypt's most powerful opposition group, the Moslem Brotherhood. But Mr. Mubarak apparently calculated that he was paying an ever steeper price for backing an international policy that, in the eyes of most Arabs and Egyptians, amounts to collective punishment of Gaza's 1.5 million citizens.

Arab satellite-television channels have been flooded with stories examining the fate of Gazans who have died because of lack of access to drugs and medical care, and angry rhetoric that Israel is seeking to starve Gaza's residents. Those TV stations today showed jubilant Palestinians bearing food and fuel from Egypt back across the border.

While starvation has not been a problem there – most of the strip's residents receive food aid from the UN – it's proved a powerful idea in the propaganda war over Gaza's fate. Mubarak said Wednesday he ordered the border guards not to intervene because "the Palestinians in Gaza are starving due to the Israeli siege... I told them to let them come in and eat and buy food and then return later as long as they were not carrying weapons."

The wall separating Gaza and Egypt was blown open at four in the morning, also blowing a hole in Israel's strategy of fighting Hamas with economic isolation. By sunrise, Palestinians from all over Gaza began fleeing toward Egypt.

They entered on foot with empty hands, and in some cases, empty suitcases. They emerged with arms and bags full, carrying a variety of goods whose prices have become astronomical in recent weeks: Milk, cookies, cooking oil, detergent.

Men drove donkeys and horses with their backs loaded with bags of cement, which has risen to about $80 a bag recently, from about $5 before. Several hundred Egyptian police gave Palestinian pedestrians a wide berth and let them come and go unperturbed, some lugging containers of diesel or leading newly purchased cows and goats.

Gazan frustration grew this week, as Israel severely limited fuel supplies. Israel was supposed to begin supplying Gaza with fuel again Tuesday, but stopped short of what was needed, says Kanaan Obeid, the vice president of Gaza's Energy and Human Resources Authority. Mr. Obeid says there is now enough fuel for another two days.

"We want to breathe some new fresh air, the air of freedom," said one woman as she headed toward Egypt with five children in tow. "I don't have much money to buy anything, but I will buy some detergent. My main reason is to just get out to see the other side."

The Hamas policemen at the border made a show of doing their job.

"We don't allow everything," explained a policeman after making one man open his duffle bag. Inside: cartons and cartons of cigarettes, an expensive habit in Gaza. The policeman let the man go. "We don't allow drugs, weapons, and alcohol," he said. "Everything else is fine."

Israel doesn't buy the line that only basic goods are coming through. It has insisted that the rockets shot at its territory are being made with imports from Egypt. Israel's foreign ministry issued a terse statement placing responsibility for Wednesday's events on Egypt.

"The Egyptians are deployed along the border between Gaza and Egypt," the statement reads. "It is their responsibility to ensure that the border operates properly, in accordance with the signed agreements. Israel expects the Egyptians to solve the problem."

Efraim Inbar, head of the Begin-Sadat Center for Strategic Studies at Israel's Bar-Ilan University, says Israel's options are limited. "There is nothing we can do.... We are not going to reoccupy the Philadelphia corridor," he says, referring to a narrow security strip between Egypt and Gaza that Israel constructed.

When the border was breached Wednesday, the options for Egyptian troops would have involved opening fire, something that would have been politically devastating for Mubarak. Also, his government has grown tired of Israeli complaints that it was failing to secure the border, and was particularly angry at a US congressional resolution in December to withhold $100 million if Egypt failed to stop border smuggling.

"Israel has succeeded in inciting the US Congress… by putting some sticks in the wheels of this relationship," Egyptian Foreign Minister Ahmed Aboul Gheit said last week. Mubarak accused Israel of fabricating evidence about the extent of the smuggling.

On Monday, an attempted breach was turned back by Egyptian forces, with guards firing into the air and dozens of Palestinians injured. Pictures of that violence made it into Egyptian papers, and public opinion is overwhelmingly in favor of opening the border. "Why should Egypt help Israel make Palestinians suffer,'' says Mohammed Ismail, who runs a fruit and vegetable shop in Cairo. "They just want to live."