What "the eye of the needle" was referring to was a small gate in city walls, about the height of a half-height door. If there was a risk of enemies coming in they would lock the gates and the only way in would be through "the eye of the needle". So the person entering would have to lean over and come through slowly.
On the city side of the gate a guard would be there with a sword. So if the person coming through was an enemy they could kill the person. In some cases it was more of a tunnel, with several slots for guards.
You COULD get a CAMEL through "the eye of the needle" but it would be a HUGE pain.
