Ala al-Ghazali was tending his tire-sized trays of Middle Eastern pastries when a man came into the shop demanding 4-1/2 lbs. of sweets "on credit."
" 'I can't do that,' I said," recalls Mr. Ghazali, who owns the sparkling bakery specializing in baklava and kanafe. "He said, 'You have to.' I said, 'I can't.' He said, 'If you don't, I'll make troubles for you.' "
Frightened, Ghazali gave the desserts away.
Only two weeks later, he says, police came in to tell him they had caught a car of armed men who were planning to rob the store.
"My father recommended that I get a gun, because crime is increasing," says Ghazali, a man in his late 20s, as he gazes out the shop window at young men congregating in the street outside, watching his foreign visitors with great interest.
"Now we go home from work together in groups, for protection," he adds. "We started doing that 10 days ago. That's something new. It's first and foremost because of lack of money, which encourages bad behavior for people who are on the edge."
Living amid a brew of political and economic complications, Gaza seems to be moving closer to the boiling point every day.
Almost 160,000 employees of the Palestinian Authority (PA) have not been paid their salaries since March, due to the cut-off in funding from international donors following the electoral rise of the Islamic militant group Hamas.
Adding even more stress to the fragile economy is the regular closure of the Karni crossing from Israel to Gaza, meaning that exporting and importing goods has become increasingly difficult. The financial strain has also led to a rise in crimes like burglary and robbery - accompanied by an interest in beefing up personal security with guns and gangs.
Bringing additional layers of tension, the struggle has also ratcheted up between Hamas and Fatah, the secular mainstream faction of the PLO (Palestine Liberation Organization).
Last week, Hamas began to deploy a new 3,000-strong security force. It's being touted as a counterforce to the Fatah-run Preventive Security Service (PSS), which was built up under the late Palestinian leader Yasser Arafat.
But Palestinian President Mahmoud Abbas, backed by Western allies, has said the force is an illegal militia that Hamas was not authorized to create. Hamas officials, meanwhile, express frustration that the security forces left over from the outgoing government are loyal to Fatah alone. In the resulting tensions, deadly gunfights between the two sides have begun to break out on a regular basis.
Monday, members of the new Hamas force traded gunfire with Palestinian police, killing a driver for Jordan's ambassador in Gaza, the Associated Press reported. On Sunday, Palestinian security officials said they discovered a 150-lb. bomb outside the Gaza home of Rashid Abu Shabak, a member of Fatah who is one of the most senior security chiefs in the PA. Officials called it an assassination attempt.
"The situation is not sustainable over the long term," says a Western official. "You can't have two different security forces manning different checkpoints in Gaza. In the last month or so, Abbas has been clear about his position on that. Hamas has to change, or it will fail."
In January, Hamas swept the Palestinian legislative council to defeat mainstream Fatah. Much of the international community has shunned the new Hamas-led government.
The Quartet - the US, the United Nations, the European Union, and Russia - says Hamas must meet several basic requirements before it enjoys funds and foreign invitations: recognize Israel, accept previous peace agreements with the Jewish state, and forswear violence.
Domestically, the political situation has been increasingly rocky. Most of the security forces remain loyal to Fatah and refuse to accept orders from Hamas.
Others, however, have welcomed the Hamas victory. Some express appreciation, for example, at the Hamas ruling that police and security troops are now permitted to grow beards, which is encouraged by Islam.
But Hamas, which has long run a secretive army alongside its political wing, now wants to have a new security force loyal to it, rather than to Fatah.
In the ensuing uncertainty over who is in charge of Gaza's security apparatus, and amid economic desperation, crime is rising.
"We've seen a jump in the crime rate recently by at least 5 percent, and it's usually robberies of homes," says police Captain Ramzi Fouda. "They go into shops or a busy market and take money. There are also a lot of young people from families who cannot meet their basic needs, so they steal products from here and there."
Mr. Fouda has himself gone without a salary for three months. "Now, we're still surviving and living on the minimum. But if it gets worse, the world won't like what they see. The more pressure there is, there will be an upheaval."
He blames much of the situation on foreign donors who don't want to assist Hamas. "We are good people, but the government can't pay salaries, and that's because the world is against our democratic process."
One economic indicator is how people are spending - or selling. Pawn shops are doing a brisk business, as are places that buy and melt gold. Nadir Mohammed Ali, who runs a small supermarket, says that he has lost about a third of his business in the past few months.
"Most of my customers who do come are buying on credit," says Mr. Ali, who has several posters of Hamas leaders tacked up in the shop. Around here, that doesn't mean credit cards, but an old-fashioned, handwritten ledger.
"When they get the money, we hope they will come and pay. Some people cannot afford to buy food, and it is shameful in our tradition to say no, but it's also hard for me," he adds. "I also need money to pay my own bills."