Palestinian cars waiting at an Israeli checkpoint in the West Bank

The report stated that in the Palestinian territories, "With a growing population and a shrinking economy, real per capita GDP is now 30 percent below its height in 1999", with 70 - 79% unemployment .  In addition, the report calculated an increase in official poverty rates from 51.8 percent in Gaza and 19.1 percent in the West Bank soar to 79.4 percent and 45.7 percent respectively (if remittances and food aid are excluded and the rates are based on household income only).

"As the Palestinian economy declines, it is becoming increasingly dependent on foreign aid," said the World Bank report, pointing the finger directly at Israeli military rule in the territories as the cause of the decline.

In the West Bank, road closures, checkpoints and restrictions were blamed for much of the problem.  "In reality, these restrictions go beyond concrete and earth-mounds, and extend to a system of physical, institutional and administrative restrictions that form an impermeable barrier against the realization of Palestinian economic potential."

In the Gaza Strip, the World Bank reported that the Israeli siege, imposed since June 2007, has caused the economy to come to a standstill.  The World Bank Report concludes that 98 percent of Gaza's industry is inactive since the siege began.