But the foreign aid, which basically paid the salaries of the Palestinian government employees, and most of the other expenses of that government, was not only cut off, but the banks that moved the money were cut off from the international banking system. Hamas, you see, is an internationally recognized terrorist organization. Since September 11, 2001, that means increasingly serious banking restrictions for terrorists.
Hamas has long depended on overseas money, usually from charities established in Western nations (especially Europe and North America). But now that money was drying up, and the additional restrictions on Palestinian banks, and foreign aid, made it worse. Ever resourceful, Hamas and the other terrorist groups began smuggling in cash, especially from Iran. Not a big deal, as many items were being smuggled in. But Israel did control the borders, and not all the smuggled cash made it through.
Now, Israel is going after the cash distribution system within the Palestinian territories. Just this week, some $1.2 million was seized from money changers and banks, who had been caught disbursing cash to terrorists. Without the cash, terrorist attacks don't happen. That's because, while there are many Moslems willing to kill for free, the specialists and leaders needed to make the attacks happen tend to be professionals, and must be paid. They are professionals, and terrorism is their livelihood. There are also goods (explosives, weapons, and so on) and services (bribes, information, sewing suicide bomb vests) that must be paid for. Some credit can be extended, and some has, but, ultimately, people must be paid.
Expenses are actually quite high for the Palestinian terrorists. The loyalty of people, in the neighborhoods where terrorist attacks are planned, is bought by giving many of them jobs. Hamas was like a separate government, before it won the election, in that it had thousands on the payroll. Many were listed as "security personnel," and this was a convenient place to stash the terrorist operatives. Now there is much less cash to spread around, and less terrorist activity as a result. For armies, logistics is moving tons of stuff long distances. For terrorists, buying local is almost always a better option. But to do that you need cash, and if you can't move cash to your operators, your terrorism doesn't happen.
Logistics are essential to terrorists, as well as for armies and air forces. In Israel, Hamas, and other terrorist organizations, are hurting pretty bad because of the foreign aid cut-off earlier this year. The money was what kept the terrorism going. The money stopped flowing because Hamas, the largest terrorist group, won most of the seats in the election for the Palestinian parliament. Hamas now had control of all that foreign aid, but the money was promptly cut off when Hamas refused to drop its goal of destroying Israel.