Agencies/Gaza City Tens of thousands of Palestinians rallied in Gaza yesterday to show support for their Hamas government, which has long been at loggerheads with Israel but is now shunned by Egypt as well.The military-backed government that toppled the Muslim Brotherhood in Cairo last year deems the Palestinian faction a security threat. An Egyptian court this month banned Hamas activities in the country, and Cairo has clamped down on smuggling tunnels across the Sinai-Gaza border.Hamas tried in vain to mollify Egypt by insisting that its hostility was directed exclusively at Israel, but is now turning up the rhetoric.“The punishment of the people of Gaza must end,” Ismail Haniya, head of the Hamas government, told the rally in a speech interspersed with chants of “Jihad is not Terrorism” over the loudspeakers.“Why punish Gaza? Was it because it achieved victory against the Occupier? Why punish Gaza? Was it because it took up the rifle against Israel?” Haniyeh said.“We are living through a difficult stage and harsh challenges, but we are not terrified and we are not defeated. We have become familiar with difficulties and this stage is not the most difficult.”Haniya warned Israel it would pay dearly if it heeded its foreign minister’s call to reoccupy the Palestinian enclave to try to halt rocket attacks. “We tell the enemy and (Foreign Minister Avigdor) Lieberman who is threatening to reoccupy Gaza that the time for your threats is over,” Haniya told a rally in Gaza City. “Any aggression or crime or stupidity you commit will cost you a very high price.” Speaking to around 40,000 supporters at a public rally marking 10 years since an Israeli air strike killed Hamas spiritual leader Sheikh Ahmed Yassin, Haniya warned Israel that Gaza militants had “far more capabilities than you imagine”. He also restated his Islamic movement’s opposition to peace talks between Israel and the West Bank-based Palestinian Authority of president Mahmoud Abbas. “Stop negotiating with the enemy,” he told the PA. “We will not recognise Israel.” The memorial rally for Yassin - the wheelchair-bound co-founder of Hamas killed on March 22, 2004 - took place under the watchful eyes of hundreds of Hamas policemen who closed off streets around the central Al-Sarraya square and took up positions on rooftops.