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This bridge in the northern Gaza Strip was destroyed by Israeli war planes in June 2006, and later rebuilt with international funds.

The occupied Palestinians in the West Bank and Gaza Strip survive the harsh conditions and severe limitations on movement because of the humanitarian aid disbursed by the international community. 

Israel relies on this assistance, because it prevents the Palestinian population from starving, preventing the full brunt of Israel’s occupation regime from being realized and thereby limiting the level of international pressure on Israel. Israel forgets, however, that this aid erases neither its responsibility nor debt to the Palestinians. Israel’s mounting debt to the Palestinians of the West Bank and the Gaza Strip, for the past 40 years of occupation, only adds to the debt it continues to accumulate to the refugees expelled in 1948.

Since the 1990s, donors (particularly from the European Union countries and mostly through the UN) have been transferring money to the Palestinians. These donations were made with intention to establish an economic infrastructure that could sustain a future Palestinian state. Through these steps, donors were hoping to contribute to bringing the 1967 occupation to an end through a two-state solution.

The State of Israel, however, never accepted this vision, and the Israeli authorities continued its occupation policies to prevent the development of a viable Palestinian economy.

International assistance was invested in building infrastructures, industry and promoting tourism, but resulted in nothing as the construction projects suffered from restrictions, raw material could not be freely imported and workers could not reach the work sites. The Israeli military has even bombed several construction sites.

Consequently, international aid failed to develop the Palestinian economy, and the second Intifada and subsequent crisis exposed the reality of Israel’s occupation in all its harshness.

As a result of this changing situation, foreign aid quickly altered its purpose. Instead of encouraging development, funds were channeled to humanitarian assistance and to the supply of food and medicine to the Palestinian population, staving off a widespread humanitarian crisis. The Israeli leadership allowed this aid to flow, as they could then levy taxes from the aid monies and gain additional revenue because humanitarian organizations purchase many products from Israeli companies. Into the bargain, aid relieves the Israeli government from having to take care of the welfare of the Palestinians under its control.

Brigadier General Yair Golan, commander of the Israeli Army in the West Bank, said in April 2007 that since the establishment of the Palestinian Authority, the standard of living of the Palestinians has not been a concern of the military. Israel does not take into account the impact of its actions on the economic reality in Area A, the area under the responsibility of the Palestinian Authority.

Yet, the Israeli government's position contains an internal contradiction. On the one hand, it prevents any economic development in the Occupied Palestinian Territories (OPT), for fear of competition from Palestinian companies. On the other, it is afraid of a humanitarian crisis that will undermine its international legitimacy.

Israel expects that international funds will continue to reach the OPT, thus allowing it to keep on avoiding responsibility for the Palestinian population. The European countries, acquiescing to the Israeli position, continue to send the funds.

Nevertheless, it is crucial to remember that Europe can stop its aid to the Palestinians (as this aid is a voluntary contribution), while the boycott that Israel itself employs against the PA is not legal. In accordance with the Paris Accords of 1994, Israel is obligated to transfer to the PA, tariffs and taxes it collects on the PA’s behalf, currently about US $60 million each month. Moreover, Israel continues to maintain effective sovereignty over the Palestinian territories and thus is responsible for funding civilian infrastructure in the area (another responsibility that has been neglected for the past forty years).

Israel expects foreign aid to continue forever, and pressures the donors to sustain aid, while it prevents economic development in the OPT and continues to profit from this aid.

It is becoming increasingly clear that the Israeli government has no long-term political plan on how to achieve a solution to the situation in Israel-Palestine. It bides its time, refusing to make any concessions and afraid of actions that will undermine its international legitimacy, while maintaining control over the OPT and preventing tens of thousands of Palestinian workers from making an honest living.

Meanwhile, the issues at the heart of the conflict—the Palestinian right of return, permanent borders, Jerusalem, water and settlements—are not discussed. As the Israeli government deals with internal matters almost exclusively, decisions regarding the OPT are taken by soldiers on the ground. The status quo and relative quiet enable the Israeli government to keep its eyes closed, but this state of events is unlikely to continue much longer.

Donors to the OPT are beginning to talk about “aid effectiveness.” They are frustrated that aid efforts are sabotaged by Israel and fail to achieve improvements.

Further, an increasing number of people are calling to force Israel to pay the costs of the damages it causes to the Palestinians. The first step in this direction is the Register of Damage Arising from the Construction of the Wall in the Occupied Palestinian Territory, established by the United Nations in order to document and measure the damages caused by the Separation Wall. Palestinians have also begun a campaign to demand compensation for confiscated lands. These initiatives are only in their beginning stages, but as they grow they will draw legitimacy and international support. Sooner or later, Israel will be confronted by an international demand to take responsibility for its crimes and pay compensations to the Palestinians.

In a worst case scenario, tired and frustrated donors will withdrawal funding, and Israel will continue in its current policies. Palestinian dependency on foreign aid will mean that mass famine is sure to follow.

The Israeli leadership might choose to ignore international protest and disavow its responsibility to the occupied population, despite sanctions and an internal political crisis that will likely follow. If Israeli authorities hold fast to their policies, plunging Israel into a rule of dictatorship and fascism, and silencing dissenting voices from within, it will lead to genocidal results. An entire generation of Palestinians will be irreversibly damaged, and decades would be needed to recover from such a humanitarian crisis.

Therefore, a strategy for political resistance must strive to avoid this scenario. International support must be mobilized to make Israel accountable for its crimes in a manner that leads Israeli leaders to realize that every assault on the Palestinian people carries a price. Donors must emphasize that their aid does not replace Israel’s obligations, and that Israel is still legally bound to compensate the Palestinians for damages caused, even if this damage was partially repaired by the donor’s aid efforts.

The sad truth is that Israel is probably no longer able to meet its debt obligations which have accumulated over the past 40 years towards the 1948 refugees and the West Bank and Gaza Strip Palestinians. Though no accurate calculations of the sums exist, they are definitely beyond Israel’s means to pay immediately. And the international community (even the U.S.) is unlikely to offer Israel much assistance in repaying this debt, since the highest sum ever offered to Israel in exchange for ending the conflict was US $35 billion, only a small fraction of the accumulated debt.

The only way to achieve the right balance between the need to compensate Palestinians for the crimes committed against them and the need to prevent an economic meltdown in Israel (which would also affect the Palestinian economy) is to create a democratically elected body that can make decisions regarding the size of the compensations and the rate of their payment. Such a body must represent both the Palestinian and Israeli populations.