UN plea for millions in Palestinian aid amid fears of economic collapse

· Half of population going short of food, agencies say

· Senior officials warn of breakdown of government

Rory McCarthy in Jerusalem
Friday December 8, 2006
The Guardian

A Palestinian man receives food aid in Khan Yunis refugee camp. Photograph: Ibraheem Abu Mustafa/Reuters

UN aid agencies launched their biggest appeal for funding to tackle the humanitarian crisis in the Palestinian territories yesterday, asking for $453m (£231m) for next year and warning of a weakening in the Palestinians' ability to govern.

Senior UN aid officials in Jerusalem said there were clear signs of a worsening economic crisis. Around two thirds of the 4 million Palestinian population were living below the poverty line and half the population were "food-insecure", meaning they could not afford the basic foods to meet dietary needs. Unemployment was running as high as 40% in the Gaza strip and at around 25% in the West Bank.

Most of the money will be spent on emergency food aid and economic recovery, including job programmes. Kevin Kennedy, the UN humanitarian coordinator, said the crisis was not only an economic collapse but was also tied to an increase in closures and access restrictions imposed on the occupied territories by the Israeli government and to continued conflict, internal political fighting and a breakdown of law and order.

The UN has warned there has been a gradual weakening of the Palestinian Authority. The crisis results from an international boycott imposed in March after the Hamas militant movement won elections and formed a government. Israel has since withheld $60m a month of tax revenues that should go to the Palestinians.

Although some of that money has been spent paying the Palestinian bills of Israeli electricity and water companies, the Israelis have now withheld nearly $600m.

The international community, under the Quartet of the US, the UN, the EU and Russia, has also halted direct funding to the Palestinian government, saying it must recognise Israel, halt violence and accept past peace agreements. The freeze means salaries for 160,000 government workers have largely gone unpaid.

Mr Kennedy said the UN programme was not trying to replace the Palestinian Authority, but he added: "Obviously the longer the current situation continues, with further deterioration, a lack of salaries, people on strike, continued military conflict on both sides, [the] further [the] weakening of the Palestinian Authority and its institutions."

The Quartet has proposed that Israel begin passing on the tax revenues it owes via a system called the temporary international mechanism, which channels money to the office of the Palestinian president, Mahmoud Abbas, a leader of the more moderate Fatah party, and not directly to the rival Hamas government. But so far Israel is withholding the revenues.

In the past year the UN said there had been a 40% increase in the number of barriers and checkpoints across the West Bank. In addition, there have been continued closures of the crossing points for people and goods out of Gaza. Under an agreement negotiated last November, Israel was to open up the main crossing points to relieve the economic crisis. But the crossings have in effect been closed, with Israel citing security concerns.

On top of the economic crisis and the restrictions on movement, in recent weeks talks between Mr Abbas and Hamas to form a coalition government appear to have entirely broken down.