RAMALLAH, West Bank (AP) — west bank swinging towards collapse Israel Palestine maintains a web of regulations that limit opportunities for Palestinians living under long-term military occupation, according to a new report from a leading conflict tracker.
The International Crisis Group says Israeli measures such as movement restrictions, revenue withholding and land expropriation are not only wreaking havoc on the Palestinian economy, but are also contributing to deep instability.
“The economic conditions necessary for a future for Palestine other than permanent conquest are being dismantled,” the report said.
The report, based on interviews with Palestinian business leaders, mayors and government officials, details the financial crisis that is plaguing businesses, households and the economy. internationally supported Palestinian Authorityadministers cities and towns in the West Bank.
The paper said Israeli policy suggests a concerted effort to “advance Israel’s own declared goals of extending control and preventing the emergence of a Palestinian state.”
Through decades of military occupation, palestinian economy being held back by checkpoint and military gate This will restrict the movement of people and goods. Households and businesses rely heavily on jobs and imports tied to Israel, and face land and trade restrictions. The approximately 3.4 million Palestinians living in the West Bank currently face around 30% unemployment, and the economy has shrunk significantly since the start of the Israeli-Hamas war.
After the Hamas attack on October 7, 2023, Israel revoked the work permits of most of the approximately 200,000 Palestinians who previously worked there. Officials cited security as the reason, but in effect they have deprived the Palestinian economy of nearly $400 million a month, or nearly a quarter of overall economic output.
Many businesses are now struggling to pay workers, contractors and suppliers, and private companies are performing an estimated 50% less than before the war, “reflecting tighter travel restrictions, supply chain disruptions and heightened uncertainty,” the report said.
“Palestinian society is surviving, but in conditions of harsh forced labor. Without redress, the outcome is likely to be hopeless and increase the risk of increased instability and violence,” the report said.
The Palestinian Authority is the largest employer and service provider in the occupied West Bank, and is at the heart of the Palestinian Authority. crisis. Government agencies are borrowing heavily to stay afloat as public sector workers go without pay and infrastructure like roads and water collapses. Unable to fund public services, patients are unable to go to hospitals and children are unable to attend school.
Because the Palestinians do not control their own borders, most of their funding comes from taxes collected on goods entering the West Bank through Israeli ports. But under the hardline cabinet of Israeli Prime Minister Benjamin Netanyahu’s government, Israel has withheld billions of dollars in unpaid tax revenue and imposed unilateral financial deductions. No transfers have taken place since May 2025.
Joost Hiltermann, special adviser for the Middle East and North Africa at the International Crisis Group, said the world’s focus on the more than two-year war in Gaza has diverted attention from the West Bank, but the changes taking place now could likely have broader implications for Palestinians’ hopes for the future.
Hilterman, who authored the report, said Israeli officials who exercise considerable power over many of the policies in question were not available for interviews. But he noted that there are disagreements within Netanyahu’s government, with settler leaders and security officials often clashing over how to manage the Palestinian economy.
“The security services do not want the Palestinian Authority or the economy to collapse, because they have to carry the burden of fully governing the territory after they have virtually destroyed it,” he said.
