Israeli defence ministry officials say work has begun on a wall deep underground along the border with Gaza for the purposes of thwarting infiltration by Hamas through its tunnels.

Israel’s barrier will eventually extend to about 37 miles along the border with Gaza and be equipped with sensors. It was designed, said officials, to replace the existing walls and fences bordering the coastal enclave of Gaza, which is home to 1.8 million Palestinians and has been ruled by Hamas since 2007. Reports in the Israeli media have suggested that the wall will cost close to $600m (£451m).

During the last Gaza war, in 2014, it was discovered that Hamas had dug numerous tunnels penetrating Israel to use to launch attacks. Since then the tunnels, and information the Israeli military and political leaders had about them, have become a divisive political issue.

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Israel is now building an initial phase of the barrier over a small area of land. Work crews were busy along the Israel-Gaza border on Thursday using cranes and heavy machinery. Caravans were scattered around the site and large metal pipes were laid on the ground.

The officials, quoted on condition of anonymity because they were discussing a classified matter, said the barrier’s construction could take years.

At present, the Gaza border with Israel has various wall and fencing sections, with some areas protected by a double fence and military patrol road. Along some stretches young Palestinians have frequently jumped the fences in the hope of finding work on the other side of the border.

Israel has described the tunnels as a strategic threat. Hamas said it was building new tunnels for defence purposes.

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Twice this year Israel has announced the discovery of tunnels reaching across the border. The second discovery, in May, led to the worst flare-up of violence since the 2014 war.

Salah Bardawil, a senior Hamas official in Gaza, said the group would not be deterred. “The Palestinian people and the resistance can overcome all the obstacles made by the occupation. The resistance is creative and advanced and doesn’t care about the occupation’s procedures,” he said.

The Israeli prime minister, Benjamin Netanyahu, said this year that he was “preparing a multi-year project to encircle Israel with a security fence, to defend ourselves in the Middle East as it is now and as it is expected to be”.