Gaza GDP grows by 16%

The figures came from International Monetary Fund official Oussama Kanaan, who emphasised on Tuesday that the jump in gross domestic product resulted from the depressed starting point of Gaza's economy.

"It's starting from a very low base after a very tight blockade," Mr Kanaan observed.

He stressed that the living standards of the 1.4 million people effectively imprisoned in the coastal enclave are still well below their level in 1994 when the Palestinian Authority was created.

In the West Bank, the economy grew at a rate of 9 per cent during the same period, as the Western-backed PA scaled back its dependence on foreign aid from $1.8 billion (£1.2bn) in 2007 to $1.2bn (£770 million) in 2010.

But Mr Kanaan warned that lower-than-expected donor aid had forced the PA to borrow extensively from local banks and left it with a $300m (£190m) black hole for 2010.

The IMF official called on the Netanyahu administration to lift all "remaining restrictions on economic activity.

"Gaza's recovery will wane unless the ban on exports and on imports of private-sector capital inputs is removed," he said.

"Similarly, the West Bank's growth is bound to slow with the persistence of restrictions on movement and access."

Mr Kanaan added that private companies are still hindered by Israeli closures and only have limited access to the 60 per cent of the West Bank that is controlled by the Israeli occupation force.