GAZA (Reuters) - When Hassan Amin al-Bana gingerly steps on the gas pedal of his bright yellow taxi, a strange smell wafts from the exhaust: deep-fried fast food.

A Palestinian taxi driver fills his taxi with cooking oil in Gaza Strip April 30, 2008. Faced with chronic fuel shortages due to an Israeli blockade and a strike by Palestinian distributors protesting supply caps, taxi drivers in the Gaza Strip are filling their tanks with cooking oil, often scrounging leftover fat from street vendors. To match feature PALESTINIANS-ISRAEL/FUEL REUTERS/Ibraheem Abu Mustafa

Faced with chronic fuel shortages due to an Israeli blockade and a strike by Palestinian distributors protesting supply caps, taxi drivers in the Gaza Strip are filling their tanks with cooking oil, often scrounging leftover fat from street vendors.

“It’s not like driving with diesel -- it takes time to get it going in the morning,” said Bana, 40, at Gaza City’s main taxi stand. “I know it’s bad for my car, but I have to pay for food for my kids so what can I do?”

The pumps at Gaza’s petrol stations have been deserted for several weeks but brightly-colored cartons of soya bean cooking oil, some smuggled from Egypt, are piled high at the taxi rank in the impoverished territory’s main city.

The drivers say they mix the oil with turpentine before filling up. Used oil is better than the fresh stuff so they often beg or buy leftovers from street vendors who sell falafel -- a fried chick-pea snack popular in the Middle East.

Vendors are doing a brisk trade.

“I set up the stall last week when I saw taxi drivers had started putting cooking oil in their cars,” said Yehya Karam, 21, as he stacked cartons of oil alongside waiting taxis. “I sell about 70 cartons a day -- I’d say most of the taxi drivers still on the streets are powering their cars this way.”

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Israel has sharply cut the amount of fuel it pumps into the Gaza Strip as part of tightened restrictions on the enclave after Hamas Islamists routed forces loyal to Palestinian President Mahmoud Abbas and wrested control last June.

Limited supplies have all but dried up since the Palestinian fuel association went on strike this month to protest the limits, preventing one million liters of diesel and petrol in tanks on the Gaza side of the border from being delivered.

Israeli restrictions on cooking oil are less stringent than for fuel, although aid groups say supply is starting to run low now it is being used to power cars. Prices are also rising.

International organizations condemn the Israel-led blockade but the Jewish state says it aims to curb Palestinian militants who fire rockets at Israel and target its border crossings.

Some drivers buy diesel smuggled through tunnels from Egypt on the black market. But a liter costs up to 20 Israeli shekels ($5.76), about three times the price in Israel and beyond the reach of most Gazans, more than half of whom live in poverty.

Others have hooked their cars up to canisters of cooking gas, but that too is in short supply. Many travel by donkey or bicycle.

The fuel shortage has also hit the enclave’s creaking sanitation system, and stinking sewage gushed onto the Gaza City streets on Wednesday when a main pump stopped working because diesel for back up generators ran out during a power cut.

Ahmed al-Beltaji, who runs a falafel stall at the taxi rank, started selling his leftover oil to drivers about 10 days ago.

“It makes the cars smell like a kitchen -- you feel like falafel is following you,” said Beltaji, crinkling his nose. “Next week they’ll be putting water in there.”