Politics & Diplomacy
Gaza's labour market has stopped functioning as Israel registers West Bank land
Graphic: Times of Palestine
Original Reporting
Gaza's labour market has ceased to function in any measurable sense. The World Bank's economic monitor for the West Bank and Gaza, published in May, put unemployment in Gaza at 78 per cent in 2025 — close to a fourfold rise on already high pre-war levels — and found that more than 90 per cent of working-age people in Gaza have no job. The Palestinian Central Bureau of Statistics said in July that the rate had passed 80 per cent, against 29 per cent in the West Bank.
The scale of the reversal is not disputed. The World Bank recorded an 83 per cent year-on-year contraction in Gaza's GDP in 2024 and a further 12 per cent fall in the first quarter of 2025, and found that by the end of 2024 real GDP across the occupied territories had fallen back to 2009 levels, with nominal GDP per capita at roughly $2,600 — below the $2,900 recorded in 2011.
The two main sources of figures disagree on 2025. The World Bank estimates Gaza's real GDP grew by about 30 per cent, attributing this to a low base effect rather than recovery, and says most productive sectors remain paralysed. PCBS states that Gaza's economy contracted by a further 8.7 per cent in 2025. Both describe an economy that is not producing.
The framework being tested against these numbers is Sara Roy's. In The Gaza Strip: The Political Economy of De-development, first published by the Institute for Palestine Studies in 1995 and reissued in an expanded third edition in 2016, Roy defines de-development as the systematic dismantling of a normal economy and its rational functioning, and argues that Israeli policy blocked rather than merely hindered internal economic development. In the third edition she argues those transformations were becoming institutionalised.
What has changed since is that the mechanisms are now written into cabinet decisions and ceasefire arrangements.
Reconstruction, the largest single determinant of employment in Gaza, has not begun. The House of Commons Library briefing on Gaza's transitional arrangements records that Prime Minister Benjamin Netanyahu says reconstruction should not be allowed to begin before Hamas is disarmed. The Jerusalem Post reported this week that Israel's security cabinet had approved the Board of Peace pilot phase and the entry of an International Stabilisation Force, while insisting that the army will continue to hold the Yellow Line. Al-Quds reported this month that the reconstruction programme has been scaled back to a limited pilot in the Mawasi area of Rafah, amid continued Israeli refusal to admit basic construction materials.
The Yellow Line itself is producing displacement. OCHA reported in January that detonations of residential buildings and bulldozing continued near and east of the line, and that the UN Human Rights Office had recorded repeated Israeli military operations west of the redeployment line leading to civilian displacement and the demolition of homes. In June, OCHA reported further encroachment of the line as troops advanced towards populated areas of Gaza City, marking a revised route with cement blocks, and noted that most of Gaza's 2.1 million people remain displaced.
Water supply illustrates what this means in a household. A UNICEF situation update in May cited OCHA figures of 4.5 to 6 litres per person per day in Gaza by late March, against a figure of about 165 litres per person per day for Israel's domestic sector taken from the Israeli government. Médecins Sans Frontières reported in April that since 1 January 2026 every request it submitted for supplies to enter through the Israeli-controlled approval system had been denied, including desalination units, pumps and chlorine, and described Israeli authorities as using aid "as a tap".
PCBS reports that more than 198,000 buildings in Gaza have been damaged, including over 102,000 completely destroyed, and that 98.5 per cent of agricultural land has lost productivity or become inaccessible. It puts Gaza's population at 2.13 million and describes a demographic haemorrhage caused by killing, displacement and deteriorating conditions. The Gaza health ministry, cited by OCHA, reported 492 Palestinians killed and 715 bodies recovered from rubble between the October ceasefire and late January.
In the West Bank the same instruments operate through paperwork. PCBS records the number of unemployed rising from about 129,000 in the third quarter of 2023 to about 280,000 in the fourth quarter of 2025, an unemployment rate of 28 per cent, with total employment down 15 per cent and construction the worst-hit sector. OCHA documented 50 Palestinian-owned structures demolished in a single fortnight in December for lacking Israeli-issued building permits, which it says are almost impossible for Palestinians to obtain; among them were eight water and sanitation structures.
On 15 February the Israeli cabinet allocated more than 244 million shekels to create a land title settlement administration inside the Ministry of Justice to register land in Area C, where Peace Now says nearly 58 per cent of land remains unregistered. Peace Now says the process requires owners to prove title in ways most Palestinians cannot, after which land is registered as state land. Amnesty International said the decision amounts to annexation under Israeli law. The Palestinian presidency called it de facto annexation.
Where intent is stated, it is stated by ministers. Announcing final approval of 3,401 housing units in E1 last August, Finance Minister Bezalel Smotrich said the plans "buries the idea of a Palestinian state" and formed part of a de facto sovereignty plan. The UN human rights office said the plan was illegal, would break the West Bank into isolated enclaves, and that transferring an occupying power's civilians into occupied territory is a war crime.
On Gaza's population, the published record is narrower. Defence Minister Israel Katz's ministry said in 2025 that a new directorate would oversee the "safe and controlled passage of Gaza residents for their voluntary departure", and Katz said in May that the plan would proceed at the proper time and in the proper manner. Haaretz, reported by Middle East Eye in June, said national security council officials revisited the plan and that Mossad representatives said no country had been identified willing to receive Palestinians from Gaza. Netanyahu has denied pursuing the resettlement of Gaza by Israelis.
No published Israeli document links the Area C registration drive or the permit-based demolitions to depopulation, and that intent is not established on the record. What is on the record is the effect, counted weekly by OCHA.
The Rafah pilot is due to begin within months, with temporary housing for tens of thousands of Palestinians subject to security screening before entry, according to the Jerusalem Post. Palestinian reconstruction plans exist — one, Phoenix Gaza, prepared by the union of Gaza municipalities with Palestinian architects, was described in a report published in Arabic by Arab48 in April — and none has been adopted.
