A Palestinian tunnel smuggler with a blowtorch sliced through an underground steel wall early Thursday, the latest of what officials say are hundreds of holes cut into the Egyptian barrier meant to stop smuggling of goods, cash and weapons to the blockaded, Hamas-run Gaza Strip.

Smugglers say the wall was never a serious obstacle, and they are far more worried about competition from consumer goods being brought to Gaza legally, now that Israel has eased its closure of the Palestinian territory.

Rare Associated Press Television News footage showed the smuggler breaching the wall.

"Look at what they call the best iron in the world," he said, his face covered by a black-and-white headscarf as he rested near the new opening. "We melt it like cheese." He refused to give his name for fear of retribution from Egyptian authorities.

The wall is seen as Egypt's most ambitious attempt to stop smuggling through the hundreds of tunnels that run under its 9-mile-long (15-kilometer-long) border with Gaza, a Palestinian territory sealed by Israel and Egypt since the violent Hamas takeover in 2007.

The tunnels have been a lifeline for the Islamic militants, keeping them supplied with cash and weapons, while delivering consumer goods to Gaza's shops.

Since work on the wall began last year, smugglers have cut hundreds of holes into the barrier of side-by-side steel planks that plunge about 60 feet (20 meters) into the ground, said two Egyptian security officials who spoke on condition of anonymity because they were not authorized to brief reporters.

The barrier is to stretch along six miles (10 kilometers) of the border, where the tunnels are concentrated, and is more than half complete.

Smugglers have bragged in recent months that they are able to cut through the wall, but Thursday marked a rare occasion when they were filmed in action.

Before dawn, five tunnel workers walked about 200 yards (meters) from Gaza through a narrow underground passage just high enough for the men to stand until they reached the dead end of the steel barrier.

The smuggler with the blow torch later said it was the third time he cut through the wall, and he expected the tunnel to resume operations within two days.

Smugglers have raised the possibility that Egypt would try flooding the passages with water, though Egyptian officials have not confirmed such a plan.

It may not be necessary.

Tunnel activity has slowed in recent weeks, as smugglers try to gauge the impact of Israel's easing of the blockade in the wake of a deadly raid of a blockade-busting flotilla bound for Gaza in late May. The killing of nine Turkish activists aboard one of the ships prompted an international outcry, and Israel came under growing pressure to open Gaza's borders.

Egypt also decided to ease its closure after the flotilla raid, opening its borders to restricted travel and limited humanitarian convoys. The move restored a link to the outside world for at least some of Gaza's 1.5 million Palestinians.

Under the old blockade rules, only basic food and medicine were allowed into Gaza. In a first step after the flotilla, Israel decided to let in most consumer goods but said Gazans would continue to be banned from travel and exporting for the time being.

For now, several smugglers say they are scaling back business or importing those items still restricted by Israel, including cement, steel and other construction supplies.

One tunnel owner, who would give only an alias, Abu Kamal, said he is only using one of two tunnels at the moment because of a drop in business. He said one of his tunnels was blocked by the wall, but he managed to cut through it.

Another, Hassan Geshto, said it cost him only about $400 to hire a crew to break through the steel wall when it blocked off his tunnel a month and a half ago. But he, too, has stopped working, because he says he can't profit enough from shipments to pay his workers.

"The metal wall has brought work for the blacksmiths of Gaza," he joked. "But to us, the wall means nothing. If they build it down to 40 meters, we will dig to 50 meters. But once Israel completely opens the crossings into Gaza, the tunnels will die alone."

Over the years, both Israel and Egypt have tried in vain to halt the smuggling.

During Israel's nearly four decades of military occupation of Gaza, Israeli soldiers frequently searched the Gaza-Egypt border area for tunnels, often razing homes to expose tunnel entrances. After Israel withdrew its settlers and soldiers from Gaza in 2005, Egypt came under growing pressure from Israel and the U.S. to halt the smuggling, particularly the flow of weapons to Hamas.

Egypt has adopted an often contradictory approach to Gaza. It has been trying to contain the Islamic militants on its doorstep, but it also wants to avoid blame in the Arab and Muslim world for cooperating with Israel in maintaining the blockade.