Madison-Rafah Journal

DAVOS, Switzerland, Jan 25, 2007 (Reuters) - Poverty levels in Gaza have soared to record levels because of Israeli restrictions and the destruction of Palestinian infrastructure, Palestinian President Mahmoud Abbas said on Thursday.

"Unemployment and poverty have reached unprecedented levels, with 79 percent of people in the Gaza Strip living below the poverty line, of which 51 percent live in utter poverty," Abbas said in a speech at the World Economic Forum in Davos.

Western donors suspended financial support to the Palestinian Authority last year after the militant Islamist group Hamas, which refuses to recognise Israel and renounce violence, swept to victory in parliamentary elections.

Abbas, who has been caught in a power struggle with Hamas, repeated his call for early elections if factions fail to reach agreement on a unity government that might be able to end sanctions and ease the economic plight.

United Nations officials say Israel's military offensive in Gaza following the cross-border abduction of an Israeli soldier also worsened the humanitarian crisis.

Abbas said the situation in the West Bank, where 2.5 million Palestinians live, was just as bleak as conditions for the 1.5 million Palestinians in Gaza. He did not specify what figures were used to define poverty and utter poverty.

"This is all because of Israel's full control over borders, restrictions on travel, massive destruction of the infrastructure (and) fragmentation of the Palestinian territories," he said.

The U.N. agency for Palestinian refugees said last month that living conditions among Palestinians had slumped to levels not seen since the 1967 Middle East War, adding the crisis deepened dramatically last year. But an International Monetary Fund report said an increase in humanitarian aid meant the economic deterioration had been less severe than originally predicted. The European Union set up a temporary mechanism bypassing the Hamas-led government to channel funds for Palestinians' basic needs.

"…Without the help of the international community, which relatively alleviated the tragedy, a complete collapse of the economic and social situation would have happened," Abbas said.

On top of the Western sanctions, Palestinians say Israeli settlements, military checkpoints and a barrier cutting into the West Bank have also hit their economy because they seal off towns from workplaces, schools and farm fields.

Israel says the barrier and checkpoints are needed to prevent militant attacks.

Abbas renewed his call for early presidential and parliamentary elections if factions failed to reach agreement on a unity government. Hamas, which trounced Abbas's Fatah faction a year ago, says a snap election would amount to a coup.

© 2007 Reuters Limited.