The United Nations says it is running out of money to provide essential goods and services to the vast majority of Gazans, while Gaza's economy still needs urgent improvements to get people off welfare.
Israel eased its blockade of Gaza last summer, allowing most consumer goods to enter the territory. Israel continues to restrict shipments of steel and concrete to Gaza, fearing that Hamas militants will use it for its purposes -- for example, building bunkers.
Recently, Israel has allowed a few exports to leave Gaza, and it plans to open up the export trade even more over the coming months.
But critics say it's not enough.
Farmers Need Exports To Get Out Of Debt
After years of not being able to export his strawberries, Bassem Abu Haloub's first shipment bound for Europe went out last week. He stands in what seems an incongruous place for a strawberry field, surrounded on all sides by sand dunes.
These strawberries and some flowers for export are part of a small but important easing of the Israeli restrictions Gazans have been living under since the militant group Hamas took over the Gaza Strip in 2007.
The move by Israel was desperately needed, Haloub says. Internal conflicts, a blockade and a punishing war two winters ago devastated Gaza's economy.
"Ninety percent of the farmers in Gaza had their farms destroyed. We are in massive debt. We haven't been able to export for years. But each year we had to plant in order to survive," he says.
Haloub owes $20,000 to creditors -- a fortune in Gaza. He rents land and buys fertilizer and pesticides every year to make a living. But because he hasn't been able to export, he's had to sell his produce locally at about one-tenth of the price he would get from European buyers.
"We are the best farmers in the world. All we want is to open the crossings so we can export. That way I can pay back my debt. All I need is a year," he says.
No Tangible Impact Yet
Nearly 2 million Palestinians live in Gaza, and because most economic life has been strangled, the vast majority of them depend on welfare. The United Nations is the lifeline, but it is running out of funds, says John Ging, the head of the U.N. mission in Gaza.
"What's changed is that there is a global financial crisis, so every country that has been donating to us is struggling themselves with their own financial circumstances. Unfortunately, here the needs are growing so we are giving out less food to more people," Ging says.
It's important to allow exports, he says, because that will inject life into the economy and get people off the breadline.
But so far, Israel's easing of the blockade has not made a tangible impact.
"These positive developments have yet to translate into making a significant difference in the lives of ordinary people here. So now, to turn that around, we have to see a very significant increase in the access," Ging says.
Other Restrictions Stymie Economy
Another one of the most visible signs of the difficult circumstances in Gaza is in the school system.
At one of one of the many schools sponsored by the United Nations in Gaza City, the boys wear button-down blue shirts and the girls wear pinstriped smocks. The school's courtyard is extremely crowded, which is an indication of a wider problem, teachers say.
Radia Shurafa, the school's headmistress, says each classroom should have no more than 30 children. But now, she says, some classes have 50 students per teacher.
The U.N. doesn't have the money to hire new teachers, and the slow pace of construction materials coming in has meant there's limited space.
"We don't want terror organizations using those building materials to their purposes," says Guy Inbar, a spokesman for the Israeli authority that deals with Gaza, explaining the continued restrictions on shipments of steel and concrete.
Inbar says Israel is continuing to ease its blockade of Gaza to help ordinary Gazans, but it will take time because there are issues of capacity. Only one out of four border crossings is open, and everything must be checked before it can go in or out of Gaza.
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