The Hamas-appointed attorney general in the Gaza Strip shut down the offices of the territory's only mobile-phone provider on Tuesday, saying the company, Jawwal, had not paid its taxes.
Police were deployed outside the firm's headquarters and posters were put up on the walls outside reading: "Jawwal Company is closed upon the attorney general's order."
Jawwal is a subsidiary of the Palestine Telecommunications Co. (PalTel), the largest listed company in the Palestinian territories. It is the sole provider of mobile phone services in Gaza, with around 1.3 million clients.
While the offices were closed, Gazans were still able to use their mobile phones and access the Internet on Tuesday, although it was not clear how long that would continue.
Executives at PalTel rejected the attorney general's accusations, saying all relevant taxes had been paid to the Palestinian Authority in the Israeli-occupied West Bank, where the company is registered and based.
PalTel Chief Executive Ammar Aker said it was not possible to separate tax filings between the two territories.
To do so would fuel division and "may expose national economic institutions that work within an international system to questions and sanctions that may result in grave damage," he said, referring to outside pressure on Hamas, which is listed as a terrorist group by the European Union and the United States.
While the Palestinian Authority, led by President Mahmoud Abbas, is nominally in charge of Gaza and the West Bank, Hamas has controlled Gaza since 2007 and appoints some of its own officials, including the attorney general.
There is a separate attorney general in the West Bank.
PalTel, which also provides fixed-line and Internet access in Gaza, said it was closing its offices there in solidarity.
"It is impossible to provide services to citizens under threats to the security and safety of both subscribers and employees," it said in a statement.
Political analysts suggested the attorney general's move was a response to the financial crisis Gaza faces, with Hamas looking for ways to prop up dwindling revenue, including by targeting major companies based in the coastal territory.
While Jawwal is the sole mobile-phone service provider in Gaza, it competes with several other providers, including Israeli ones, in the West Bank.
The West Bank-based Palestinian government condemned Hamas for forcing companies to pay tax in Gaza and for closing the Jawwal offices, saying such measures were "illegal and deepen division and undermine reconciliation".