In the latest move of cat-and-mouse between Israel and the gambling industry, police have decreed that internet service providers must block access to online gambling sites.

With the exception of the state lottery and football pools, gambling is illegal in Israel. But Israelis have long been on the lookout for ways around the law.

Underground casinos have always flourished. Police are constantly closing down operations - they closed six in the last month, but this is thought to be the tip of the iceberg.

In the late 1990s when the Oslo peace process was underway, busloads flocked daily to the casino in the Palestinian West Bank city of Jericho. However, Israel prohibited its citizens from entering the city after the second intifada broke out in 2000.

Around this time home internet connections were becoming more common, and internet gambling on foreign sites became popular. Over time, sites run by Israelis and operated off-shore sprang up, many offering a user interface in Hebrew and webcam connections with Hebrew-speaking card dealers and croupiers.

And so began a battle of wits between site operators who were giving Israelis a chance to gamble from Israel, and the police.

Police have arrested some Israelis who used foreign servers for sites intended for Israelis. They have also tried to undermine operations, ordering credit card companies last year to refuse payments to gambling sites. The companies compiled.

But gambling sites outwitted police. In the last two months they began selling, through agents in Israel, prepaid cards - essentially virtual gambling chips - which could be bought with cash from kiosks and other outlets, and used on the websites.

Gustavo Mesch, a Haifa University academic who researches sociology and the use of the internet, predicts that the issue could become a drawn-out high-profile battle, and escalate as far as the Knesset. He said: "There is a basic fear -if it starts with blocking gambling sites, where will it stop?"