Rafah/Tel Aviv - For the Gaza Strip to see a truce between Israel and Palestinian fighters, the owners of the tunnels along the southern strip's border with Egypt will have to see the end of their businesses and livelihoods.

While Islamic group Hamas, which is running the strip, demands that Israel lift its economic blockade of Gaza as part of a truce, Israel demands "international guarantees" that no more weapons be smuggled through the vast network of tunnels running under the Gaza- Egypt border town of Rafah.

One of the ideas being discussed by the Israelis, Egyptians and Americans is to have a US presence on the Egyptian side of the border which would assist the Egyptians in uncovering the openings of the tunnels on their side of the frontier. The US muscle would come with electronic equipment to detect the tunnels and then blow them up in controlled explosions.

The Americans would also actively help the Egyptians in blocking the smuggling chain, which starts in Sudan, passes through Egypt and the Sinai desert and ends up in Gaza, senior Israeli security officials said.

Hamas however will want to replace the some 600 rockets it fired at southern Israel since the Gaza offensive began, as well as the unknown number destroyed in scores of Israeli airstrikes on houses, offices, even mosques allegedly used by its activists to store the rockets.

Israel on the other wants to ensure that Hamas cannot import more Russian-type, Iranian-upgraded Grad rockets, nor the raw materials such as pipes and fertilizer needed to make more of its own Qassam rockets.

In fact, a "complete" end to weapons smuggling from the Sinai to Gaza was a "basic" condition for any truce, caretaker Prime Minister Ehud Olmert emphasized earlier this week.

"When we started the calm (truce) more than half a year ago, the rockets' range was 16 kilometres," he said, referring to the six- month, Egyptian-mediated truce which fell apart in early November and formally ended December 19.

"Now they (Hamas) are firing rockets to a distance of 40 kilometres and more. They obtained these means during the calm.

"We are not prepared for another truce of that kind. We will not accept it and we will not agree to it!" he told reporters in Jerusalem, emphatically wagging his finger in the air as he spoke.

Already from the second day of the offensive, Israeli fighters jets have bombed the tunnels again and again.

By day 13 of the offensive, the Israeli military said at least 150 tunnels have been destroyed.

Residents in Rafah were unable to verify that number Thursday, but confirmed "dozens" had been destroyed.

Many, if not hundreds, however remain intact: According to Israeli estimates the number of tunnels before the offensive stood at 200 - 300. According to Rafah residents and Hamas there were as many as 700 - 1,000.

Some of the tunnels pumping Egyptian diesel through underground pipelines are still operating, but all others are not working, residents in Rafah told Deutsche Presse-Agentur dpa. They require a physical presence to pull and lift the chains of large plastic containers, which carry anything from soft drinks, to cigarettes, sweets and electrical appliances such as televisions and fridges.

The work is too risky amid the unpredictable and recurring airstrikes, they explained. Hamas, which taxes other goods, has banned the entry of alcohol and drugs. It is unknown how many of the tunnels are used for smuggling drugs and weapons, and how many of them remain in tact. The tunnel owners are reluctant to speak to journalists about the weapons smuggling, which they keep a top secret.

One tunnel owner, calling himself Abu el-Barra, said he and his brothers lost three tunnels, which cost them a total of 350,000 dollars to build - a fortune in Gaza, where almost 80 per cent live under a poverty line of 2 dollars a day.

He referred to the tunnels - through which he brought in sheep and cows, and which are seen by many Palestinians as a lifeline amid the tough Israeli blockade - as "al-Khutut," Arabic for "the lines."

"But we do not care about the money or losses. All we care about is our safety and to come out of this war alive," he said.