Background
The weaponry was concealed within dozens of bags containing over 700 demolition blocks made of standard explosives, some of which were sensitive and qualitative (Semtex, R.D.X, Tetritol); 1,000 electric detonators, 52 electric delay mechanisms for explosive devices, 226 hand grenades, three Katyusha rockets, seven Bazooka rockets, six Anti-Vehicle mines and four antipersonnel mines, a mortar shell, two Sterling submachine guns equipped with silencers, four handguns, seven pen guns, and thousands of bullets.

The chain of events
The element responsible for smuggling the weaponry into the Gaza Strip was Fatah's terrorist apparatus called The Western Sector, directed by Arafat second in command  Khalil Al Wazir also known as Abu Jihad. Abu Jihad was responsible for a series of attacks in Israel, including the Coastal Road massacre on March 12, 1978 killing 32 Israelis. Abu Jihad was assassinated in Tunis in April 1988.

Two of the apparatus' seniors directed by Abu Jihad were responsible for smuggling the weaponry: Nihad Abu Reiss also known as Abu Munir and Subhi Abu Kirsh also known as Abu Munzer. These were seniors in the Gaza Committee of the Western Sector Forces ― the body responsible for all of Fatah's Gaza Strip-based activity, including its terrorist activity.

The weaponry was smuggled into the Gaza Strip in 1977 from Lebanon through the sea. The route, method, and cover were similar to drug smuggling ― the vessel traveled from Lebanon to Al Arish in the Sinai Peninsula (at the time the Sinai was part of Israel); the cargo was then shipped to the Gaza Strip by a large fishing boat that carried eight armed men on deck. The men unloaded the weaponry and delivered it to a resident of Sheikh Agelin who was told that following a storm at sea, they had to cast a large part of the cargo to prevent the vessel from drowning.

The resident, a recruit of Abu Munir, received the weaponry and hid it (for about two years and a half until its exposure) in the area of Sheikh Agelin in Gaza, in pre-made pits at a deserted citrus plantation, near a sewage treatment facility. His job was to store the weaponry and pass its location to a messenger. The messenger was then instructed to shift responsibility for the DD to a warehouseman from Gaza.
The warehouseman responsible for the DD was also a Fatah-recruit who received means to communicate with the Western Sector in Lebanon. On instruction, he was to deliver the weaponry to the apparatus' messengers.

And so, in December 1979, a Fatah messenger arrived to the warehouseman's home, demanded the weapons in order to pass them to Gaza Strip-based Fatah terror groupings. The messenger, a Sajaiyeh resident, was known to the ISA as a Gaza Strip-based senior operations activist. ISA estimated he was assigned to missions on behalf of the Western Sector; therefore, he was put under ISA surveillance to discover which activists he was meeting with.

The messenger was arrested and interrogated; he revealed his links with the Lebanon-based Western Sector HQ and missions he accepted from Abu Munzer, including receiving weaponry from warehousemen in Gaza and Rafah. He was instructed to contact wanted people and infiltrators in the Gaza Strip in order to reawaken the dormant terrorist activity at the time (possibly due to the impact of the ongoing Israel-Egypt peace process).
The messenger provided names of other activists who were then arrested, including the warehouseman's name. However, the latter was not arrested since he traveled to Lebanon to report to his handlers about the weapons' transfer to the messenger. Upon his return to the Gaza Strip in the first half of 1980, the warehouseman was arrested and interrogated about his part in the affair.

When Western Sector seniors understood the messenger was detained and interrogated, they suspected ISA may be able to trace the DD's location. The warehouseman was instructed to return to the Gaza Strip (even though they feared he would be arrested) and change the DD's location. They even deployed additional messengers to ensure the weapons' hideout. Nonetheless, this activity did in fact allow ISA to expose the DD (and others) following the messengers' arrest. One of them disclosed in his interrogation details of a vast weapons DD located north of Gaza. In the course of his interrogation he was taken out of prison and guided ISA and IDF men to the DD.
The exposure of the large weapons DD was published in the media later on. Menachem Begin, Israeli PM at that time, sent a letter of appreciation to ISA director:

"To: ISA Director,
I was glad to hear your account of the large exposure of weapons by ISA men. This proves once again that civil servants are on their guard and their activity and constant alert help to save lives of Israeli citizens.
Please deliver the Israeli government's greetings to all of those who carried out the task and all of our friends who guard the state and ensure security for its citizens.
Yours respectfully,
M. Begin"