Aid officials say that the present economic crisis in Gaza is far worse than anything seen before, because Israel is allowing almost no goods in or out of the Palestinian enclave.
In the past, Israel has largely used border closures to prevent some 20,000 Palestinians working in Israel, but the refusal to allow trucks in or out has thrown a further 30,000 to 50,000 Gazans out of work.
"All infrastructural projects like roads and sewers being funded by the international donors have stopped in recent weeks because you cannot bring cement into Gaza," one senior aid official said. Fruit has rotted on trucks waiting to pass through the Erez checkpoint into Israel. A box of tomatoes costs about three sheckels (65p) in a shop in Gaza because it can no longer be sold in Israel.
Israel refused yesterday to lift the closure imposed after the Beit Lid bombing in January, which killed 21 Israelis, but said it would build two large cargo terminals to make it easier to move goods.
Western countries giving financial aid to Gaza feel that their efforts to improve the standard of living of people in the enclave are undermined by what amounts to an Israeli economic siege. An aid official said yesterday: "You can't have 40-50 per cent unemployment and not call it economic collapse."
Palestinians see the Israeli closure as collective punishment, whereas the Israelis see it as a commonsense method of stopping suicide bombers. Ironically, one result of the closure is to force the poorest Gazans to rely on the charity of Islamic associations established by the fundamentalist movement Hamas. In the offices of one association in Gaza city this week Muen Rajit, 46, explained: "I have to get support. I have nine children, my leg is crippled and I can't work. I get 100 sheckels as well as rice, meat sugar and flour."
The desperate economic situation in Gaza and the West Bank was emphasised to the Israeli cabinet by the army Chief of Staff, Amnon Shahak, who said unemployment in the West Bank was 50 per cent, and about 60 per cent in Gaza.
This in turn weakens the Palestinian Authority. "The economic situation in Gaza was better before May, 1994 [when the authority was set up]," said Khalid Salaam, economic adviser to Yasser Arafat. "So peace is delivering nothing to the people."
Further disillusionment with the Oslo peace accord among Palestinians is likely to follow Israel's announcement yesterday that it would confiscate Arab land for Jewish housing and a police station in east Jerusalem. Mr Arafat said: "They are daily breaching what had been agreed upon and this confiscation of land is one of these violations."
Israel said a total of 133 acres of land would be confiscated in two different parts of Arab east Jerusalem. The decision also drew criticism from members of the Israeli government.
"We continue to take and take, while the wounds from the earlier expropriations haven't healed," said the Israeli Communications Minister, Shulamit Aloni. "This is a political message the government cannot afford to send," she told Israel Radio.
Khalil Tawfakji, a Palestinian expert monitoring land seizures, said this was the first time since Israel captured east Jerusalem in 1967 that officials said outright their intention was to build a new Jewish neighbourhood. "In the past they always said the expropriation was for public purposes without giving details."