A barefoot Palestinian boy walks towards his house in a destroyed area in the Rafah refugee camp, in the southern Gaza Strip, 7 Dec. 2006

U.N. agencies are asking for a record $450 million in aid for Palestinians over the next year. VOA's Jim Teeple reports from Jerusalem, U.N. officials say the money is urgently needed for job creation, cash assistance and food.

It is the largest U.N. Palestinian aid appeal in history. U.N. officials say their request for $453 million is a nearly 20 percent increase over an earlier aid appeal made just six months ago.

U.N. officials say poverty is at record levels in the Palestinian territories, and food insecurity is a growing problem. Most donor aid has been cut to the Palestinian government, and Israel has suspended the transfer of customs and tax revenue to the Palestinians, because the Hamas-led Palestinian government refuses to recognize the Jewish state.

The U.N. says 65 percent of Palestinians now live in poverty, 30 percent of Palestinians are unemployed and 50-percent do not have a reliable supply of food.

David Shearer, who heads the U.N. office for the coordination of humanitarian affairs in the Palestinian territories, says the cutoff of donor assistance and tax revenue to the Palestinians, as well as increasing Israeli restrictions on the movement of Palestinians in the West Bank, has crippled the Palestinian economy. He says the U.N. appeal is only to cover basic needs.

"The needs are actually much more than 450 million," he said. "We are looking at 600 or 700 million in customs revenue that has not been returned to the Palestinian Authority. If they were returned, and people actually got salaries, then a lot of the money that we would be asking for to combat poverty wouldn't be necessary."

A Palestinian family walks by an Israeli army jeep, 31 Oct. 2006

Israel says its roadblocks and checkpoints in the West Bank are designed to stop terrorist attacks on Israelis. Israel also says it could resume transferring customs and tax payments, once a Palestinian government agrees to recognize Israel, renounce violence and adhere to previous agreements between Israel and the Palestinian Authority. Most international donors, including the United States and the European Union, also set those conditions for resuming donor aid.

U.N. officials say one of their biggest concerns is that, as the situation in the Palestinian territories deteriorates, the U.N. is being asked to assume more of the responsibilities of the Palestinian Authority. What is needed they say is a political settlement to the current crisis, so that Palestinians can rebuild their institutions before it is too late.