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Gazans Face Despair as Economic Crisis Worsens

Scott Bobb

Gazans are reeling economically from a drop in foreign aid and a blockade by an Israeli government that views the Hamas leadership in Gaza as a terrorist organization.

During shopping day in Beach Camp, Gaza, market goods are available, but there are few shoppers.

Anwar al-Hadad says this is because people have no money. "In the market, prices are not too high right now. But life is difficult. There are no salaries, or only a few have salaries. Most people are sitting at home and really suffering because of the lack of money," al-Hadad said.

Life has always been hard in Gaza, home to 1.1 million Palestinian refugees and their descendants -- the legacy of a war that led to Israel's formation in 1948. The unemployment rate is 35 percent and three out of every four refugees depend on foreign assistance.

The U.N. Relief and Works Agency gives the neediest refugees $11 every three months and some flour and cooking oil. The agency suspended the distributions at the start of this year due to a lack of funds,

But the European Union has agreed to support the program until June. U.N. spokesman Adnan Abu Hasna says such programs are vital to maintain peace and stability in the territory.

"We are keeping people moderate here by telling them that 'You are not forgotten by the international community. The international community cares about you,'" Hasna said,

Palestinians living in the West Bank face similar economic hardships, due partly to the governing Palestinian Authority's massive budget deficit.

A U.N. report this month blames the deficit on a decline in donor support because the global economic downturn and opposition to the Palestinian bid for full membership in the United Nations.

Analyst Sami Abdel-Shafi says Palestinians are suffering because of politics, the stalled peace talks with Israel and their own internal conflicts.

“Palestinians in Gaza are pressured. The post-government [Hamas] in Gaza is pressured because it is boycotted. The Palestinian Authority in the West Bank is also pressured because it has gone through a very professional process of institution building and towards the end of this it is facing financial trouble,” Abdel-Shafi said.

Many Palestinians believe that resolving the conflicts would boost people's morale, says U.N. spokesman Adnan Abu Hasna.

"Peace in Gaza will give the people hope but here in Gaza today there is no tomorrow. No hope. There is no tomorrow. You cannot talk about what will happen after five minutes here in Gaza," Hasna said.

And as Gazans see no way out, their despair is mounting.

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