Thousands of Palestinians held massive protests across Gaza yesterday, expressing their support for Hamas, burning U.S. and Israeli flags and denouncing efforts by Western powers and Israel to isolate the Hamas-led government. Protesters also condemned the aid cutoff, describing it as "starvation and siege" of Palestinians.
160,000 people, about 30 percent of the Palestinian work force, including 70,000 armed security personnel -- have not been paid their salaries for two months due to decisions by the U.S., European and other donor nations to halt aid to Palestinians together with Israel's decision to freeze tax money collected on behalf of the Palestinian leadership.
"We are really terrified" of what will happen if the situation is not turned around, warned, Commissioner-General Karen Koning AbuZayd of the United Nations Relief and Works Agency, during her one-day stop in Washington.
"We are not talking of an explosion in Gaza alone, but its effect on the whole region," Mrs. AbuZayd said.
"Governments in the region will start taking sides, and this will polarize the region more than before."
Palestinian women in the West Bank started selling their jewelry to get money to pay for food, according to an editorial on UK's Telegraph.
"They were given to me by my husband as a dowry on my wedding day, so to lose them is to lose my best-loved memories," said Afrah Jowdad, as she handed her bracelets to a merchant in the ancient West Bank gold market of Nablus.
"But I have six children and no other way to pay for food, so I have no option other than selling my bracelets."
Dressed in the in traditional Hijab, Palestinian women gathered outside the Star Display jewellery emporium, to sell rings, necklaces and other finery.
According to Palestinians, selling one's dowry brings shame but with the current difficulties the vast majority of Palestinians are facing as a result of cutting aid and squeezing the Palestinian government, basic needs prevail over social mores.
"I have never seen anything like this: I am averaging 400,000 shekels [£50,000] of gold purchases every day," said the merchant, Abdel Hakim Hawari, 40.
Palestinian officials have warned that the Palestinian economy could collapse within months, but this is the latest and most strong evidence of the imminent economic meltdown faced by 3.5 million Palestinians, as sanctions against the new Palestinian Authority begin to bite.
Palestinians had been suffering a weak economy even before the election of Hamas, and they were heavily dependent on financial support from Europe and America, but the victory of Hamas in the country's Parliamentary elections, which provoked Brussels and Washington withdraw funding, the Palestinian economy is expected to collapse soon.
Yesterday, the European Commission announced it would propose that the European Union offer $43 million in humanitarian aid for food, sanitation, water and health projects, with the aim of aiding the pressured Palestinian Authority, Agence France-Presse reported.
Last year, the European Union gave $130 million.
Aid workers fear that cutting aid, coupled with the limited services available to the Palestinian people, the Palestinian Authority may soon collapse.
"All the international aid agencies put together will not be able to replace the services that the Palestinian Authority provides," said David Shearer, the head of the United Nations Office for Humanitarian Affairs.
Families say that the Palestinian territories are drying up, medical supplies in hospitals are running dangerously low and basic food supplies are unaffordable for most of Palestinians.
"I just don't know what is going to happen when people run out of gold to sell," said Mr. Hawari.
"This cannot go on for ever and, when it finishes, there will be trouble."
A group of 36 aid agencies working with Palestinians, including the British groups Merlin and Save the Children UK, sent a joint letter to Israel in which they demanded it respect last November's agreement to allow trade in and out of Gaza.
But Israel insists on keeping tight checks on traffic, claiming it's aimed at preventing Palestinians attacks against Israelis.
It's noteworthy that only 12% of the PA's economic activity was ever internally generated, according to the World Bank, the rest came from outside, either through Palestinians earning wages in Israel or foreign donor support.
When Hamas turned to Muslim nations seeking their help, they won promises of tens of millions of pounds from friendly Arab nations, but International banks refused to transfer Arab funds, out of fear of being proscribed by the United States banking authorities for helping Hamas, labeled by Bush's admin as "terrorist organisation".
"There will be a lot of refugees and non-refugees in a bad way, in need of food and medical care, and we are quite frightened," Mrs. AbuZayd further warned, adding that the number of people in need of aid had jumped from an average of 800 a month in the past five years to 25,000 in April.
Mrs. AbuZayd, who was in Washington to discuss with State Department and National Security Council officials ways to resolve the crisis as humanitarian agencies struggled to increase their effort to help those affected by the political policies, said there's little hope that the United States would change its stance.
"There is not much flexibility from this side of the Atlantic. ... We will make our case, but we are not too confident that we will get too far on it," Mrs. AbuZayd said.
"People expect pressure to succeed. I think it might push in the wrong direction. We don't know who will break first," she added.