The World Bank said today that Israel's system of checkpoints, delays in transferring millions of dollars in tax revenue, and its block on most exports from Gaza have caused lasting damage to the Palestinian economy.
A report by the organisation said that deteriorating water and transport infrastructure were also serious problems, particularly in Gaza.
Israel officials cite security concerns for restrictions.
The report went on to state that economic problems were exacerbated by shortfalls in donor aid, forcing the Palestinian Authority to borrow unsustainable amounts from local banks to stay afloat.
It also revealed that in 20 years, Palestinian exports have fallen from 10 per cent of the economy to just 7 per cent.