20091221

CAIRO (Reuters) - Egyptian officials confirmed on Monday that Egypt is building an underground steel barrier next to its border with Gaza, where Palestinians have built tunnels to smuggle in goods to beat an Israeli blockade.

The construction could create tension with Palestinians at a time when Egypt is mediating to finalise a swap of Palestinian prisoners held in Israel for Israeli soldier Gilad Shalit, who is being held by Palestinians in Gaza.

Egypt was criticised in the Arab world and in Arab media for not taking a stronger position against Israel's attack on Gaza last year. During the attack, Israel bombed sites along Egypt's border, saying it sought to destroy Palestinian smuggling tunnels.

Government workers have begun placing steel tubes 50 centimetres in diameter and 20 metres long one above the other, the Egyptian security officials said.

Eyewitness from Rafah and Gaza said on Sunday they could see workers attaching short tubes end-to-end then placing them deep into the ground as a single long tube. It was not clear how deep the barrier would extend.

Some politicians in Cairo and Gaza believe the barrier is designed to tighten a blockade clamped around Gaza by Israel. Gaza residents have built hundreds of tunnels under the border to smuggle basic goods into the territory.

Israelis say the tunnels are also used to smuggle in weapons. Many have remained open and new ones are constantly being dug despite Israeli aerial bombardment.

The security sources said the barrier is designed to protect the Egyptian border against smuggling operations, while Egypt's Foreign Ministry said it had no official statement on the work.

Egypt and Germany have been mediating the prisoner exchange, and a planned visit by German Foreign Minister Guido Westerwelle to Cairo later on Monday has fuelled speculation a deal may be close.