"Do you know what it’s like living in Gaza?" a friend of mine asked. "It is like walking on broken glass tearing at your feet."

On January 21, fifty-four House Democrats signed a letter to President Obama asking him to dramatically ease, if not end, the siege of Gaza. They wrote:

The people of Gaza have suffered enormously since the blockade imposed by Israel and Egypt following Hamas’s coup, and particularly following Operation Cast Lead…. The unabated suffering of Gazan civilians highlights the urgency of reaching a resolution to the Israeli-Palestinian conflict, and we ask you to press for immediate relief for the citizens of Gaza as an urgent component of your broader Middle East peace efforts…. Despite ad hoc easing of the blockade, there has been no significant improvement in the quantity and scope of goods allowed into Gaza…. The crisis has devastated livelihoods, entrenched a poverty rate of over 70%, increased dependence on erratic international aid, allowed the deterioration of public infrastructure, and led to the marked decline of the accessibility of essential services.

This letter is remarkable not only because it directly challenges the policy of the Israel lobby–a challenge no doubt borne of the extreme crisis confronting Palestinians, in which the United States has played an extremely damaging role–but also because it links Israeli security to Palestinian well-being. The letter concludes, "The people of Gaza, along with all the peoples of the region, must see that the United States is dedicated to addressing the legitimate security needs of the State of Israel and to ensuring that the legitimate needs of the Palestinian population are met."

I was last in Gaza in August, my first trip since Israel’s war on the territory one year ago. I was overwhelmed by what I saw in a place I have known intimately for nearly a quarter of a century: a land ripped apart and scarred, the lives of its people blighted. Gaza is decaying under the weight of continued devastation, unable to function normally. The resulting void is filled with vacancy and despair that subdues even those acts of resilience and optimism that still find some expression. What struck me most was the innocence of these people, over half of them children, and the indecency and criminality of their continued punishment.

The decline and disablement of Gaza’s economy and society have been deliberate, the result of state policy–consciously planned, implemented and enforced. Although Israel bears the greatest responsibility, the United States and the European Union, among others, are also culpable, as is the Palestinian Authority (PA) in the West Bank. All are complicit in the ruination of this gentle place. And just as Gaza’s demise has been consciously orchestrated, so have the obstacles preventing its recovery.

Gaza has a long history of subjection that assumed new dimensions after Hamas’s January 2006 electoral victory. Immediately after those elections, Israel and certain donor countries suspended contacts with the PA, which was soon followed by the suspension of direct aid and the subsequent imposition of an international financial boycott of the PA. By this time Israel had already been withholding monthly tax revenues and custom duties collected on behalf of the Authority, had effectively ended Gazan employment inside Israel and had drastically reduced Gaza’s external trade.

With escalating Palestinian-Israeli violence, which led to the killing of two Israeli soldiers and the kidnapping of Cpl. Gilad Shalit in June 2006, Israel sealed Gaza’s borders, allowing for the entry of humanitarian goods only, which marked the beginning of the siege, now in its fourth year. Shalit’s abduction precipitated a massive Israeli military assault against Gaza at the end of June, known as Operation Summer Rains, which initially targeted Gaza’s infrastructure and later focused on destabilizing the Hamas-led government through intensified strikes on PA ministries and further reductions in fuel, electricity, water delivery and sewage treatment. This near daily ground operation did not end until October 2006.

In June 2007, after Hamas’s seizure of power in the Strip (which followed months of internecine violence and an attempted coup by Fatah against Hamas) and the dissolution of the national unity government, the PA effectively split in two: a de facto Hamas-led government–rejected by Israel and the West–was formed in Gaza, and the officially recognized government headed by President Mahmoud Abbas was established in the West Bank. The boycott was lifted against the West Bank PA but was intensified against Gaza.

Adding to Gaza’s misery was the decision by the Israeli security cabinet on September 19, 2007, to declare the Strip an "enemy entity" controlled by a "terrorist organization." After this decision Israel imposed further sanctions that include an almost complete ban on trade and no freedom of movement for the majority of Gazans, including the labor force. In the fall of 2008 a ban on fuel imports into Gaza was imposed. These policies have contributed to transforming Gazans from a people with political and national rights into a humanitarian problem–paupers and charity cases who are now the responsibility of the international community.

Not only have key international donors, most critically the United States and European Union, participated in the sanctions regime against Gaza, they have privileged the West Bank in their programmatic work. Donor strategies now support and strengthen the fragmentation and isolation of the West Bank and Gaza Strip–an Israeli policy goal of the Oslo process–and divide Palestinians into two distinct entities, offering largesse to one side while criminalizing and depriving the other. This behavior among key donor countries reflects a critical shift in their approach to the Palestinian-Israeli conflict from one that opposes Israeli occupation to one that, in effect, recognizes it. This can be seen in their largely unchallenged acceptance of Israel’s settlement policy and the deepening separation of the West Bank and Gaza and isolation of the latter. This shift in donor thinking can also be seen in their unwillingness to confront Israel’s de facto annexation of Palestinian lands and Israel’s reshaping of the conflict to center on Gaza alone, which is now identified solely with Hamas and therefore as alien.

Hence, within the annexation (West Bank)/alien (Gaza Strip) paradigm, any resistance by Palestinians, be they in the West Bank or Gaza, to Israel’s repressive occupation, including attempts at meaningful economic empowerment, are now considered by Israel and certain donors to be illegitimate and unlawful. This is the context in which the sanctions regime against Gaza has been justified, a regime that has not mitigated since the end of the war. Normal trade (upon which Gaza’s tiny economy is desperately dependent) continues to be prohibited; traditional imports and exports have almost disappeared from Gaza. In fact, with certain limited exceptions, no construction materials or raw materials have been allowed to enter the Strip since June 14, 2007. Indeed, according to Amnesty International, only forty-one truckloads of construction materials were allowed to enter Gaza between the end of the Israeli offensive in mid-January 2009 and December 2009, although Gaza’s industrial sector presently requires 55,000 truckloads of raw materials for needed reconstruction. Furthermore, in the year since they were banned, imports of diesel and petrol from Israel into Gaza for private or commercial use were allowed in small amounts only four times (although the United Nations Relief and Works Agency, UNRWA, periodically receives diesel and petrol supplies). By this past August, 90 percent of Gaza’s total population was subject to scheduled electricity cuts of four to eight hours per day, while the remaining 10 percent had no access to any electricity, a reality that has remained largely unchanged.

Gaza’s protracted blockade has resulted in the near total collapse of the private sector. At least 95 percent of Gaza’s industrial establishments (3,750 enterprises) were either forced to close or were destroyed over the past four years, resulting in a loss of between 100,000 and 120,000 jobs. The remaining 5 percent operate at 20-50 percent of their capacity. The vast restrictions on trade have also contributed to the continued erosion of Gaza’s agricultural sector, which was exacerbated by the destruction of 5,000 acres of agricultural land and 305 agricultural wells during the war. These losses also include the destruction of 140,965 olive trees, 136,217 citrus trees, 22,745 fruit trees, 10,365 date trees and 8,822 other trees.

Lands previously irrigated are now dry, while effluent from sewage seeps into the groundwater and the sea, making much of the land unusable. Many attempts by Gazan farmers to replant over the past year have failed because of the depletion and contamination of the water and the high level of nitrates in the soil. Gaza’s agricultural sector has been further undermined by the buffer zone imposed by Israel on Gaza’s northern and eastern perimeters (and by Egypt on Gaza’s southern border), which contains some of the Strip’s most fertile land. The zone is officially 300 meters wide and 55 kilometers long, but according to the UN, farmers entering within 1,000 meters of the border have sometimes been fired upon by the IDF. Approximately 30-40 percent of Gaza’s total agricultural land is contained in the buffer zone. This has effectively forced the collapse of Gaza’s agricultural sector.

These profound distortions in Gaza’s economy and society will–even under the best of conditions–take decades to reverse. The economy is now largely dependent on public-sector employment, relief aid and smuggling, illustrating the growing informalization of the economy. Even before the war, the World Bank had already observed a redistribution of wealth from the formal private sector toward black market operators.

There are many illustrations, but one that is particularly startling concerns changes in the banking sector. A few days after Gaza was declared an enemy entity, Israel’s banks announced their intention to end all direct transactions with Gaza-based banks and deal only with their parent institutions in Ramallah, in the West Bank. Accordingly, the Ramallah-based banks became responsible for currency transfers to their branches in the Gaza Strip. However, Israeli regulations prohibit the transfer of large amounts of currency without the approval of the Defense Ministry and other Israeli security forces. Consequently, over the past two years Gaza’s banking sector has had serious problems in meeting the cash demands of its customers. This in turn has given rise to an informal banking sector, which is now controlled largely by people affiliated with the Hamas-led government, making Hamas Gaza’s key financial middleman. Consequently, moneychangers, who can easily generate capital, are now arguably stronger than the formal banking system in Gaza, which cannot.

Another example of Gaza’s growing economic informality is the tunnel economy, which emerged long ago in response to the siege, providing a vital lifeline for an imprisoned population. According to local economists, around two-thirds of economic activity in Gaza is presently devoted just to smuggling goods into (but not out of) Gaza. Even this lifeline may soon be diminished, as Egypt, apparently assisted by US government engineers, has begun building an impenetrable underground steel wall along its border with Gaza in an attempt to reduce smuggling and control the movement of people. At its completion the wall will be six to seven miles long and fifty-five feet deep.

The tunnels, which Israel tolerates in order to keep the siege intact, have also become an important source of income for the Hamas government and its affiliated enterprises, effectively weakening traditional and formal businesses and the rehabilitation of a viable business sector. In this way, the siege on Gaza has led to the slow but steady replacement of the formal business sector by a new, largely black-market sector that rejects registration, regulation or transparency and, tragically, has a vested interest in maintaining the status quo.

At least two new economic classes have emerged in Gaza, a phenomenon with precedents in the Oslo period: one has grown extremely wealthy from the black-market tunnel economy; the other consists of certain public-sector employees who are paid not to work (for the Hamas government) by the Palestinian Authority in the West Bank. Hence, not only have many Gazan workers been forced to stop producing by external pressures, there is now a category of people who are being rewarded for their lack of productivity–a stark illustration of Gaza’s increasingly distorted reality. This in turn has led to economic disparities between the haves and have-nots that are enormous and visible, as seen in the almost perverse consumerism in restaurants and shops that are the domain of the wealthy.

Gaza’s economy is largely devoid of productive activity in favor of a desperate kind of consumption among the poor and the rich, but it is the former who are unable to meet their needs. Billions in international aid pledges have yet to materialize, so the overwhelming majority of Gazans remain impoverished. The combination of a withering private sector and stagnating economy has led to high unemployment, which ranges from 31.6 percent in Gaza City to 44.1 percent in Khan Younis. According to the Palestinian Chamber of Commerce, the de facto unemployment rate is closer to 65 percent. At least 75 percent of Gaza’s 1.5 million people now require humanitarian aid to meet their basic food needs, compared with around 30 percent ten years ago. The UN further reports that the number of Gazans living in abject poverty–meaning those who are totally unable to feed their families–has tripled to 300,000, or approximately 20 percent of the population.

Access to adequate amounts of food continues to be a critical problem, and appears to have grown more acute after the cessation of hostilities a year ago. Internal data from September 2009 through the beginning of January 2010, for example, reveal that Israel allows Gazans no more (and at times less) than 25 percent of needed food supplies, with levels having fallen as low as 16 percent. During the last two weeks of January, these levels declined even more. Between January 16 and January 29 an average of 24.5 trucks of food and supplies per day entered Gaza, or 171.5 trucks per week. Given that Gaza requires 400 trucks of food alone daily to sustain the population, Israel allowed in no more than 6 percent of needed food supplies during this two-week period. Because Gaza needs approximately 240,000 truckloads of food and supplies per year to "meet the needs of the population and the reconstruction effort," according to the Palestinian Federation of Industries, current levels are, in a word, obscene. According to the Food and Agriculture Organization and World Food Program, "The evidence shows that the population is being sustained at the most basic or minimum humanitarian standard." This has likely contributed to the prevalence of stunting (low height for age), an indicator of chronic malnutrition, which has been pronounced among Gaza’s children younger than 5, increasing from 8.2 percent in 1996 to 13.2 percent in 2006.

Gaza’s agony does not end there. According to Amnesty International, 90-95 percent of the water supplied by Gaza’s aquifer is "unfit for drinking." The majority of Gaza’s groundwater supplies are contaminated with nitrates well above the acceptable WHO standard–in some areas six times that standard–or too salinated to use. Gaza no longer has any source of regular clean water. According to one donor account, "Nowhere else in the world has such a large number of people been exposed to such high levels of nitrates for such a long period of time. There is no precedent, and no studies to help us understand what happens to people over the course of years of nitrate poisoning," which is especially threatening to children. According to Desmond Travers, a co-author of the Goldstone Report, "If these issues are not addressed, Gaza may not even be habitable by World Health Organization norms."

It is possible that high nitrate levels have contributed to some shocking changes in the infant mortality rate (IMR) among Palestinians in the Gaza Strip and West Bank. IMR, widely used as an indicator of population health, has stalled among Palestinians since the 1990s and now shows signs of increasing. This is because the leading causes of infant mortality have changed from infectious and diarrheal diseases to prematurity, low birth weight and congenital malformations. These trends are alarming (and rare in the region), because infant mortality rates have been declining in almost all developing countries, including Iraq.

The people of Gaza know they have been abandoned. Some told me the only time they felt hope was when they were being bombed, because at least then the world was paying attention. Gaza is now a place where poverty masquerades as livelihood and charity as business. Yet, despite attempts by Israel and the West to caricature Gaza as a terrorist haven, Gazans still resist. Perhaps what they resist most is surrender: not to Israel, not to Hamas, but to hate. So many people still speak of peace, of wanting to resolve the conflict and live a normal life. Yet, in Gaza today, this is not a reason for optimism but despair.