Israel on Sunday froze the shipment of building materials into Gaza after discovering a sophisticated "terror tunnel" into the Jewish state from the Palestinian territory, a defence official said.

"Due to security reasons, (the army) decided to stop for now the transfer of building materials into Gaza," Guy Inbar told AFP.

Inbar, spokesman for the Israeli defence ministry unit responsible for civilian affairs in the Palestinian territories, did not say how long the ban would remain in force.

Last month, Israel permitted cement and steel deliveries into the Gaza Strip for use by the private sector for the first time since 2007.

It had banned such transfers for fear the Islamist militant movement Hamas which rules Gaza would use construction materials to fortify its positions and build tunnels for attacks on the Jewish state.

Israeli officials said on Sunday that a tunnel running 450 metres (yards) into Israel and allegedly intended as a springboard for militant attacks had been uncovered by troops.

Exposing the tunnel "prevented attempts to attack Israeli civilians and soldiers", Defence Minister Moshe Yaalon said in a statement.

Yaalon said it was "further proof" that Hamas "was continuing to prepare itself for confrontation with Israel and terror activities".

Israel and Hamas reached a truce, brokered by Egypt, after a deadly confrontation in November.

Prime Minister Benjamin Netanyahu congratulated the army "for exposing the Gaza terror tunnel" at a weekly cabinet meeting on Sunday.

"It is part of our aggressive policy against terror," he said.

According to the army, the tunnel, which was discovered last Monday, was "approximately 18 metres underground and extends 1.7 kilometres".

"The tunnel was built with approximately 500 tons of cement and concrete," the army said. It had lighting and a rail for a small trolley, "probably intended to transfer terrorists or soldiers from side to side rapidly."

Its statement made mention of Israeli soldier Gilad Shalit, who was abducted by Palestinian militants and transferred to Gaza via a tunnel in 2006 and held for five years.

The army said work on the tunnel probably lasted over a year.

An AFP correspondent said the tunnel's walls were reinforced with cement and a man could stand upright in it.

Israeli NGO Gisha, which lobbies for freedom of movement for Palestinians, urged Israel to lift the building material freeze, saying it would affect civilians and humanitarian projects in blockaded Gaza.

"Israel has the authority and the obligation to take measures to protect the lives of its soldiers and citizens," it said.

"However, it is not clear how blocking the entrance of construction materials, including those intended for international projects, promotes that goal."

The NGO said the freeze "raises the spectre of a punitive act".

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