Since Oct. 11, Gaza-based traders who were importing food from Israel and the Israeli-occupied West Bank have lost access to a system introduced in spring by Cogat, the Israeli government body that oversees aid and commercial shipments, and have received no reply to attempts to contact the agency, the sources said.

The shift has driven the flow of goods arriving in Gaza to its lowest level since the start of the war, a Reuters analysis of official Israeli data shows. The details of the halt in commercial goods into Gaza have not been previously reported.

Cogat did not respond to Reuters' questions about commercial food imports and aid to Gaza. The agency says it does all it can to ensure that enough aid enters the coastal enclave, and that Israel does not prevent the entry of humanitarian aid. It rejects allegations Israel has blocked supplies.

Between Oct. 1 and Oct. 16, the overall flow of shipments to Gaza - including both aid and commercial goods - fell to a daily average of 29 trucks, according to Cogat statistics.

That compares with a daily average of 175 trucks between May and September, the data shows. Commercial shipments -- goods bought by local traders, trucked in after direct approval by Cogat, and then sold in marketplaces in Gaza -- accounted for about 55% of the total during that period.

Two sources involved in food supply said the reason for halting commercial shipments was because Israel worried that the Hamas militant group was receiving revenues from the imports.

A Hamas spokesperson denied that the group had stolen food or used it for revenue and said it was trying to ensure the distribution of aid in Gaza.

The commercial system's apparent closure came as Israel launched a new military operation against Hamas in northern Gaza, a parallel development that has obstructed humanitarian aid deliveries. The U.N.'s World Food Programme said in a statement on Sunday the operation cut off all aid deliveries through crossings in the north for at least two weeks this month.

Plummeting volumes of aid into Gaza have prompted the United States to threaten to withhold military support to Israel.

Following international criticism, Cogat said in statements this week that Israel had allowed scores of trucks of aid into Gaza, including dozens via crossings in the north. It did not provide full details or respond to Reuters' requests for information for this story.

A series of measures by Israeli government departments and the military were already reducing food deliveries to Gaza. In August, Israeli authorities introduced a new customs rule on one aid channel, and began scaling down the separate track of commercial goods.

Getting enough food to Gaza's 2.3 million people, almost all of whom have been displaced, has been one of the most fraught issues of the war. Aid agencies have renewed their warnings of widening malnutrition and the danger of famine.

James Elder, a spokesman for U.N. child agency UNICEF, said aid supply had improved earlier this year after warnings of famine prompted a push to open new supply routes and access points to Gaza.

"We've seen an absolute reversal of that," he told reporters this week. "We see now what is probably the worst restrictions we've seen on humanitarian aid" to Gaza during the war.

Before the war, some 500 trucks per day entered Gaza carrying a mix of aid and commercial imports, such as food, building materials and agricultural supplies.

Reuters spoke to five Gaza-based importers, two businessmen sending goods from the West Bank, a Gaza-based business official and three people involved in aid delivery.

"The situation is getting desperate," said Ibrahim Baraka, a resident of southern Gaza. "We have some non-perishable aid but there's virtually no fresh produce anymore. A kilo of onions is $15 in southern Gaza."

His account was corroborated by five other residents, seven traders and five humanitarian workers.

COMMERCIAL IMPORTS DOWN TO A TRICKLE

Israel largely blocked commercial imports at the beginning of the war, but allowed them to resume from Israeli-controlled territory in May, in a move first reported by Reuters. Gaza-based businessmen could submit import requests to Cogat and have food delivered via the main goods crossing in southern Gaza.

The arrival of commercial goods augmented the supply of fresh, nutritious products not contained in aid shipments, U.N. officials and residents said.

After Israel invaded the southern town of Rafah in May, hampering the main U.N. aid route, the commercial one grew to account for a significant proportion of food supplies.

Cogat lists these private sector goods as making up some 98 of the 175 daily trucks that entered Gaza on average from May to September.

But this route was fraught with problems from early on, according to eight Palestinian businessmen who spoke to Reuters.

Convoys carrying goods are often looted by armed gangs or desperate Gazans, according to all those interviewed for this story. Importers hiked prices to pay for high transport costs and protection for their shipments.

As a result, commercially imported goods were too expensive for many Gazans, the businessmen said.

A group of around 20 traders was given priority, the businessmen and the three aid sources said; their import requests were approved ahead of others'.

Some of those priority traders resold their import permission to smaller businesses, charging them thousands of dollars to get trucks in, a dozen sources in the Gaza and West Bank business communities, as well as international aid groups, told Reuters.

Cogat also changed the method for submitting requests several times, the traders said - switching from an online form to a WhatsApp number, and back to an online form, but one that required a password that only the trusted traders knew.

A new rule introduced in September required traders to show bank records proving their business had a turnover of at least 15 million shekels ($4 million) per year, according to a message sent by Cogat to traders, seen by Reuters.

All the traders said the latest online form had stopped working for any importers. They said messages sent to up to five different Cogat WhatsApp numbers had gone unanswered.

Cogat did not respond to questions about these issues.

Data from the agency shows the private sector trucks getting through have slowed to a trickle. On Oct. 1, 54 trucks of "private sector" deliveries were sent, the last significant shipment of commercial goods. Between Oct. 8-10 another 17 were recorded, bringing October's average to 5 trucks a day.

ISRAEL-UN COMPROMISE

During the war, aid to Gaza has been delivered via several different routes that came in and out of use, according to U.N. and Israeli officials.

The main source of food for Gazans who cannot afford to buy from local markets remains international humanitarian aid organized by the U.N., which is subject to security approval by Cogat for each consignment.

Before the war, the chief route was into southern Gaza via Egypt, after a detour for Israeli scans.

After Israel's military assault on Rafah in May, U.N. aid deliveries on that route have slumped because insecurity made them increasingly difficult to organize, U.N. relief agencies have said.

The U.N. then relied heavily on a route bringing supplies via Jordan through Israel to a crossing at Gaza's northern tip. But shipments halted after Israel introduced a customs rule on some of the aid, a move reported by Reuters this month.

Israel and the UN have reached a compromise on the main sticking point of that new rule, according to two people with knowledge of the matter.

But deliveries from Jordan remain lower after renewed fighting in the north of Gaza, interviews with five people involved in getting aid into Gaza and Cogat data show.

According to Cogat's online database, an average of two trucks per day carried aid from Jordan to Gaza over the first two weeks of October, down from around 18 a day in previous months.

($1 = 3.7438 shekels)