The International Labor Organization, ILO, says the economic and employment situation has deteriorated in both Palestinian areas and Israel since the current crisis erupted. ILO experts who visited the region say the private economic sector in Palestinian territories has totally broken down because of the closure of borders and the Israeli incursions. They say at least one-half of the more than 800,000 Palestinian workers are unemployed.

But, the ILO regional director for Europe and Central Asia, Friedrich Buttler, says that under the current situation, the term unemployment has become meaningless.

"There are people who have employment but cannot actually work because they cannot move from one place to another," he said. "You have to imagine how internal closures work, that there are checkpoints between and around all the settlements and the cities and that you nearly cannot move."

Mr. Buttler says about two-thirds of the population in the West Bank and Gaza are living under the poverty line. This means each member of a family lives on just over two dollars a day. Mr. Buttler says the Israeli economy also has been seriously affected by the crisis. He says unemployment in Israel has risen from six to 10 percent and is likely to go higher.

"You can find that there is nearly no tourism existing," he said. "And, if you go through the town and you see Jerusalem and you see the newly constructed big hotels, you find them completely empty. So, the tourist sector is in a big crisis, on both sides, as well in Palestine as in Israel."

The ILO experts went to Ramallah and Nablus on the West Bank and to Gaza. They also went to Tel Aviv, Jerusalem, and the Golan Heights. They met with government, employer, and worker representatives, and gathered additional information from private agencies and institutions.

The ILO team will report to the ILO's annual conference in June. Mr. Buttler says the team will propose vocational training and financing for small and medium-sized industries in the Palestinian territories. He says the ILO can provide the technical skills and know-how to improve the Palestinian economy. But, he says there are limits to what it can do in the absence of peace.