U.N. Report Paints a Grim Picture of the Life Palestinians Now Live

JERUSALEM —  Mohammed abu Khalaif’s family has been selling dry goods in a shop near Damascus Gate in East Jerusalem for more than 50 years, but he can’t remember a time when business was this bad.

Since the Israeli military imposed new roadblocks and travel restrictions on Palestinians two months ago, sales of soap powder, corn, beans and paper products to West Bank customers have dried up. The Khalaifs have laid off two workers and shifted from a wholesale to a retail operation because customers are buying only what they need and in small quantities.

“Before, it used to be so busy,” Khalaif said. “Customers only come in occasionally now, and they’re pinching every shekel.”

As the Khalaifs’ business goes, so goes the rest of the West Bank, Gaza Strip and East Jerusalem. A United Nations report released Thursday paints a bleak picture of the economic destruction that has resulted from the lattice of checkpoints and the roadblocks, incursions and destruction of buildings and supply networks under the military lock-down of the last several months.

The numbers tell part of the story. Unemployment for East Jerusalem, the West Bank and Gaza rose sharply between the first and second quarters, from 36% to 50%, the U.N. reported, as the military tightened restrictions on travel and trade.

“This is a staggering rise in unemployment,” Terje Roed-Larsen, the senior U.N. official in the region, told reporters Thursday. “The Palestinian population is scrambling to survive.”

For the first time in memory, the jobless rate in the West Bank--63.3% on curfew days--is higher than the Gaza Strip’s 50%, following the encirclement of Ramallah, Hebron and other major West Bank trading centers.

Lost income has grown to $7.6 million a day, the U.N. calculated, drawing on preliminary figures from the Palestinian Central Bureau of Statistics. The total is $3.3 billion since October 2000, just after the current intifada began, with the average Palestinian now living on less than $2 a day.

As people run out of money, they are borrowing from relatives, selling valuables and doing without. Even items such as cereal and potato chips are considered luxuries, said Mohammed Iftha, a 26-year-old manager at Masuji Co., a consumer products supplier operating in Ramallah. His sales have fallen 40%, and travel restrictions prevent Iftha from visiting the factory, holding meetings or handling other basic tasks.

Israel has legitimate security concerns, U.N. officials stressed. But they argue that most Palestinians don’t pose a threat and that many of the measures--such as blocking water trucks from entering West Bank towns--don’t enhance security and could even undermine the safety of Israelis by making Palestinians feel more vulnerable.

Lt. Col. Yarden Vatikay, an Israeli Defense Ministry spokesman, said all steps taken are for legitimate reasons.

“Terje Larsen is not the defense minister of the state of Israel,” he said. “He should leave it to us to say what’s necessary to protect our people.”

None of the measures are intended as harassment, he said. “The only thing we’re trying to do is prevent monstrous attacks.”

Aid groups have tried to fill some of the gaps amid the sharp economic contraction in the West Bank and Gaza Strip, but they can’t hope to fully make up the shortfall, Roed-Larsen said. The World Food Program is increasing food deliveries to serve 500,000 people a day, while the U.N. Relief and Works Agency is feeding 1 million. Half of all Palestinians in the West Bank, Gaza and East Jerusalem receive some food assistance.

“This is not a natural catastrophe. It’s a man-made crisis,” Roed-Larsen said. “The main cause is the security system built by Israel after the [June] reoccupation of the West Bank and the closures and restrictions imposed on the West Bank and Gaza Strip.”

Aid agencies add that the cost and time involved in delivering food have risen sharply. Road closures mean shipments often must be transferred by hand to get around barriers. And many agencies have had to hire foreign drivers or use their senior staff because most Palestinians are no longer allowed through the checkpoints.

“I’m supposed to be the American representative here,” said Thomas Neu, a Jerusalem-based official with Near East Refugee Aid. “But at some point every day I end up being the chauffeur.”

Development officials say privately that the military closures have put them in an awkward position. If they don’t concentrate on food and water delivery, people go without. By concentrating on those things, however, they’re unable to work on more substantive long-term projects that are their principal mandate. Furthermore, by easing the burdens on the population, they may be helping extend the status quo of military restrictions.

Palestinians are doing what they can to adapt to the circumstances. The Four Seasons cafe opened two months ago on Sultan Suleiman Road in East Jerusalem. The original business plan, crafted before the intifada began, drew on tourists, Israelis and West Bank visitors. All those groups have dried up.

The day the intifada started, manager and principal Ibrahim Hindiyeh said, he went home distraught. But he and his investment partners had little choice but to lower their prices and goals and depend almost exclusively on local customers less affected by the restrictions.

“Sometimes you can only go forward through the fire because there’s nowhere else to go,” Hindiyeh said.

With every violent incident in East Jerusalem, business evaporated for a week until people slowly begin emerging from their houses. Several weeks ago, seven people were wounded in a coffee shop near the Four Seasons. The cafe’s level of business has become a barometer of the political situation.

With roads blocked, the restaurant can’t get its basic supplies from the West Bank and must buy everything, at higher cost, in Israel. Trust is so low and fear so high that Israeli suppliers refuse to drive even a few feet into East Jerusalem, forcing the cafe owners to haul in shipments by handcart. The few Jewish customers ask the cafe staff to bring takeout food to the East Jerusalem border a couple of blocks away.

Palestinian business owners say the community needs its mobility restored.

“We just try and survive,” Hindiyeh said. “Practically speaking, we’re trying to operate in a state of war. You just hope things eventually get better.”