Ever since the Beit Lid bomb which killed 21 Israelis, 55,000 Palestinians living in the West Bank and Gaza had been stopped from working in Israel where they once earned $700,000 a day. This is vital income for the depressed Palestinian economy, with unemployment in Gaza running at 55 per cent and 42 per cent in the West Bank. "The closure is collective punishment," said Mohammed Shtayyeh, a Palestinian economist. The ban also stopped people attending the main Palestinian hospitals in Jerusalem and universities on the West Bank.
Palestinians fear they will be permanently displaced by workers from Romania, Poland or Thailand. A week after the Beit Lid bomb, the Israeli cabinet authorised the import of another 6,000 foreign workers. People living close to some of the cheaper hotels in Jerusalem already complain about drunken sprees by foreign guest workers. In the Armenian quarter of the old city ,a housewife said: "I have to step over the bodies of Romanians lying dead drunk in the street." The Central Bureau of Statistics says it does not know how many foreign workers are in the country because many are here semi-legally. But Mr Rabin has called for up to 25,000 foreign workers to be brought into Israel, not a large number given that the total labour force is almost two million. Some Israelis express surprise about why they need any non-Israeli labour since the unemployment rate at the end of last year was 10 per cent and there is still heavy immigration from the former Soviet Union.
According to official figures released yesterday, 79,800 immigrants came to Israel in 1994, 68,000 from the former Soviet Union. However, Palestinians work largely in the building trade or at picking fruit or flowers, while 70 per cent of the immigrants come from a professional or technical background.
Mr Shtayyeh says the threat to bring in cheap guest workers - as in the Arab oil states - is empty because Palestinian labour is so cheap, costing the employer "one-third of what he would spend to have an Israeli perform the same job". He says a Thai or Romanian also has to be housed while Palestinians commute from their homes. That the government is looking for ways to prosecute Israeli employers who sneak Palestinian workers into the country gives support to the idea that there is still strong demand for their labour.
But Eli Sagi, an economics consultant in Tel Aviv, is not so sure. He says frequent closures of the West Bank and Gaza have made Israeli employers chary of employing Palestinians and the number is already well down from the 120,000 who worked in Israel as recently as 1993.
Mr Sagi said that he believed the withdrawal of Palestinian labour has "a very minor effect on the Israeli economy but is devastating for them. It only really affects our construction sector. It might produce some housing delays, but fruit and vegetableswill not rot in the fields".