While the neighborhoods of Gaza remain in ruins, and tens of thousands of residents still lack water and power, reconstruction of its more illicit infrastructure was well underway Saturday in this bustling town on the Egyptian border.

A Caterpillar backhoe bored into the sandy earth. Generators rumbled under the cover of tattered white tents. And above and below ground, teams of workers set about restoring the warren of smuggling tunnels that the Israeli air assault had sought to destroy.

Despite constant bombardment, particularly during the early stages of the conflict, some of the smugglers' tunnels remained open, Rafah residents and tunnel operators said. Many others have reopened since Israel and Hamas separately announced cease-fires a week ago.

Israel says the tunnels are used to transport arms, such as materials to make the rockets that Hamas fighters fire into southern Israeli towns. But the passages are also a key component of an economy stifled by import restrictions imposed by Israel since the Hamas Islamist movement seized control of the Gaza Strip in 2007.

"Of course I am worried they will bomb us again, but we bring in things that Gaza needs," said Jamil al-Masri, 40, the proprietor of a wood-lined tunnel that descends nearly 40 feet underground and extends 250 feet across the border before emerging near an Egyptian farm.

Asked about the reopening of the tunnels, a spokesman for the Israeli military, which has estimated that at least 300 tunnels traverse Gaza's southern border, said only that it "is ready for any scenario according to the directives of the Israeli government."

Some of the tunnels are poorly concealed by white tents that line the border about 70 yards north of a gray concrete fence topped with barbed wire. But much of the tunneling is done in plain sight, during daylight hours. Delivery trucks circled the area to pick up newly smuggled goods to distribute to other cities.

Masri said his tunnel is used to transport basic food staples and other items. It took 15 workers three months to complete, he said, and required an investment of $70,000.

Although it was finished a day before Israel began its assault Dec. 27, Masri said he kept it closed for safety until the conflict ended. On Saturday, his workers hoisted out large, white sacks full of dolls and candy bars with the help of a large pulley.

A wooden ladder leads most of the way to the tunnel's base, giving way a few yards from the bottom to footholds and handholds carved into the earth. A crew plies its trade in stifling heat inside the cavern, about three feet high and illuminated by a string of tiny white lights.

Other tunnels were in various states of disrepair. Workers busily hoisted bucketfuls of dirt and debris from an airstrike that left what had been a 40-foot hole only about 10 feet deep.

Another entrance was so badly damaged that the operator started over with a new hole about 10 feet away. Workers used the pulley to lower local children holding plastic bags of food for workers re-digging the passage.

Operators said they generally split their profits evenly with partners on the Egyptian side of the border, where early in the week some in the tunnel business had complained that the slew of aid organizations trucking supplies into Gaza was cutting into their haul.

Stopping the smuggling was believed to be one of Israel's primary war aims. At the height of the conflict, Israeli Foreign Minister Tzipi Livni and then-Secretary of State Condoleezza Rice reached an agreement calling for unannounced steps to "stem the flow of weapons and explosives into Gaza."

The smugglers in Rafah, however, seemed to doubt that was possible.

"The money is too good," Masri said.