Egypt has reportedly begun building an underground iron wall along its border with the Gaza Strip in a major upgrading of its efforts to end smuggling through tunnels. Egyptian security officials, speaking on condition of anonymity, confirmed that the wall project is under way. Local residents reported Egyptian clearing work was in progress 90 metres from the border over the last three weeks.

The Egyptian project comes at the encouragement of the US. After Israel's devastating Operation Cast Lead in Gaza last winter, Washington took the lead in encouraging international efforts to stop smuggling of weaponry into the Strip through the tunnels. Israeli defence officials say that the Qassam rockets that struck Israeli targets before and during the Gaza war came from Egypt via the tunnels.

But the underground links also form a vital lifeline for the passage of everyday necessities in the face of a draconian Israeli blockade of the Strip that has at times gone so far as to bar the import of pasta into the coastal enclave.

According to the Israeli newspaper Haaretz, the wall will be 9-10km long and will be sunk 20-30m into the ground. It is supposed to be impenetrable and impossible to melt. It is not expected to halt smuggling completely, but to cut hundreds of existing tunnels and force diggers to go deeper than they have gone before.

Leaders of Hamas, the Islamist movement that rules the Gaza Strip, are believed to have been greatly dismayed by Egypt's willingness to implement the project while the Israeli blockade continues and while Egypt keeps its own crossing with the Strip closed. But last night they declined to put their feelings on record, apparently wary of further antagonising Cairo, which is already angry over Hamas's refusal to sign an Egyptian-brokered national reconciliation deal with the rival Fatah movement.

But Hassan Khreisheh, an independent nationalist in the West Bank who is deputy speaker of the Palestinian Legislative Council, described the project as "a shame for the Egyptians".

"They talk of supporting the Palestinians while they co-operate with others in imposing the siege and preventing food and supplies from reaching Gaza," Mr Khreisheh said. "They are collaborating with the Americans."

Abdullah Abdullah, a legislator who supports Mahmoud Abbas, the moderate Palestinian President, voiced understanding for the Egyptian move. "We can't deny Egypt's right to protect its sovereignty and people against intrusion. At the same time we want the Egyptians not to deny the Palestinians their means of livelihood."

Egypt is wary of Hamas because it is an offshoot of the Muslim Brotherhood, the long-established transnational movement that supports the creation of an Islamic state in Egypt and which has long been a thorn in the flesh of President Mubarak. Cairo was criticised both before and during the war for allegedly providing diplomatic cover for Israel.

Mark Regev, a spokesman for Israeli Prime Minister Benjamin Netanyahu, said: "I cannot confirm what the Egyptians are doing and not doing. But I can say over the last two months the Egyptians have been enhancing their anti-smuggling efforts. We welcome that."