The Gaza Strip's ruling Hamas movement canceled its upcoming anniversary rally Sunday, saying it was inappropriate to celebrate at a time of deep economic woes in the territory.

It was the first time the Islamic militant group has canceled the festivities since seizing power six years ago. Hamas has used the elaborate annual commemoration of its December 1987 founding to demonstrate its control, with large military-style gatherings attended by hundreds of thousands of people.

The decision illustrated just how hard the Gaza economy has been hit since Egypt's Islamist President Mohammed Morsi, Hamas' main patron, was ousted in a July military coup. Morsi hails from the Muslim Brotherhood, Hamas' parent movement, and moved to improve ties with the Islamic militant group.

The new military government in Egypt has imposed tough border restrictions, including the destruction of smuggling tunnels that long sustained the Gaza economy and provided a key source of income for Hamas.

Hamas official Ashraf Abu Zayed said funds allocated for the celebration, scheduled for next week, would be used "to alleviate the suffering" of the people.

"The decision to cancel the rally is a message of solidarity recognizing the difficult circumstances experienced by our people in Gaza," Abu Zayed said.

Egypt's border crackdown, accompanied by Israeli restrictions on Gaza, has caused power cuts, fuel shortages and the virtual collapse of the construction industry, a major employer in Gaza. Last month, the lack of power caused a major spill at Gaza's main sewage treatment plant, flooding downtown streets in rancid waste.

According to the United Nations, unemployment has risen since the tunnels were closed and now stands at roughly 30 percent. Nearly one half of Gaza's 1.7 million people receive food aid from UNRWA, the UN agency for Palestinian refugees.

Hamas seized power in 2007 after taking the territory from the forces of Western-backed Palestinian President Mahmoud Abbas. With Abbas now governing from the West Bank, the takeover has left the Palestinians divided between two governments. Repeated attempts at reconciliation have failed.

Despite its difficulties, Hamas maintains its rigid opposition against Israel and says it remains committed to the state's destruction.

Hamas, which has killed hundreds of Israelis in suicide bombings and other attacks, battled Israel to a stalemate during eight days of fighting a year ago. It maintains an arsenal of thousands of rockets and other weapons.

Abu Zayed said although the celebrations were canceled, Hamas "didn't stop the preparation and processing for the battle of liberation and victory, God willing."