With Biden, Palestinians Seeking Freedom Get Permits Instead

Palestinian workers line up while waiting at the Palestinian side of Erez crossing to cross into Israel, in the town of Beit Hanoun, northern Gaza Strip, Sunday, March. 27, 2022. (AP)
Palestinian workers line up while waiting at the Palestinian side of Erez crossing to cross into Israel, in the town of Beit Hanoun, northern Gaza Strip, Sunday, March. 27, 2022. (AP)
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With Biden, Palestinians Seeking Freedom Get Permits Instead

Palestinian workers line up while waiting at the Palestinian side of Erez crossing to cross into Israel, in the town of Beit Hanoun, northern Gaza Strip, Sunday, March. 27, 2022. (AP)
Palestinian workers line up while waiting at the Palestinian side of Erez crossing to cross into Israel, in the town of Beit Hanoun, northern Gaza Strip, Sunday, March. 27, 2022. (AP)

For more than two years, the Biden administration has said that Palestinians are entitled to the same measure of "freedom, security and prosperity" enjoyed by Israelis. Instead, they've gotten US aid and permits to work inside Israel and its Jewish settlements.

The inconsistency is likely to come up when President Joe Biden visits Israel and the occupied West Bank this week for the first time since assuming office.

Israeli officials will likely point to the thousands of work permits issued to Palestinians in the West Bank and Gaza, allowing them to make far higher wages and injecting much-needed cash into economies hobbled by Israeli restrictions. Biden will likely tout the tens of millions of dollars in aid to the Palestinians he restored after it was cut off during the Trump years.

Supporters say such economic measures improve the lives of Palestinians and help preserve the possibility of an eventual political solution.

But when Biden is driven past Israel's towering separation barrier to meet with Palestinians in the West Bank town of Bethlehem, he will hear a very different story - about how Israel is cementing its decades-long military rule over millions of Palestinians, with no end in sight.

"Economic measures do have the potential to positively contribute to making peace, but that would require Israel and the US having a plan to end this 55-year-old military occupation," said Sam Bahour, a Palestinian-American business consultant based in the West Bank.

"They don’t, so any so-called economic ‘confidence-building measures’ are merely occupation-entrenching measures," Bahour said.

Israel's short-lived coalition government issued 14,000 permits to Palestinians in Gaza, which has been under a crippling blockade since the Hamas movement seized power 15 years ago. Israel says the blockade is needed to prevent Hamas from arming itself.

Israel also increased the number of permits issued in the West Bank, where well over 100,000 Palestinians work inside Israel and the settlements, mostly in construction, manufacturing and agriculture. It has even begun allowing small numbers of Palestinian professionals to work in higher-paying jobs in Israel's booming high-tech sector.

The government billed those and other economic measures as goodwill gestures, even as it approved the construction of thousands of additional settler homes in the occupied West Bank.

The Biden administration has adopted a similar strategy, providing financial assistance to Palestinians but giving Israel no incentive to end the occupation or grant them equal rights. Even its relatively modest plan to reopen a US Consulate in Jerusalem serving Palestinians hit a wall of Israeli opposition.

Ines Abdel Razek, advocacy director at the Palestine Institute for Public Diplomacy, says both the United States and the European Union are "throwing money at the Palestinians" instead of owning up to their complicity in the occupation.

"All Biden is trying to do is maintain a certain quiet and calm, which for Palestinians means entrenched colonization and repression," she said.

Michael Milshtein, an Israeli analyst who used to advise the military body in charge of civilian affairs in the territories, says the theory of "economic peace" - or promoting economic development in the absence of peace negotiations - goes back decades.

He says it's making a resurgence because of the prolonged lack of any peace process and the political crisis within Israel, but at best will only bring temporary calm.

"This is the way to preserve stability," he said. "This is not a way to solve deep political problems."

For individual Palestinians, the permits are a godsend. Their average wage inside Israel is around $75 a day, twice the rate in the West Bank, according to the World Bank. In Gaza, where unemployment hovers around 50%, tens of thousands lined up for the permits last fall.

But critics say the permits - which Israel can revoke at any time - are yet another tool of control that undermines the development of an independent Palestinian economy.

"Every permit Israel issues to Palestinian workers goes to serve Israel’s economic development and hollows out Palestine’s workforce, so we in the private sector will remain unable to create a different economic reality," Bahour said.

Even as it issues work permits, Israel is tightening its grip on what's known as Area C - the 60% of the West Bank under full Israeli control according to interim peace agreements signed in the 1990s. The Palestinian Authority has limited autonomy in an archipelago of cities and towns.

Area C includes most of the West Bank's open space and natural resources. The World Bank estimates that lifting heavy restrictions on Palestinian access to the area would boost their economy by a third. Israel captured the West Bank in the 1967 Mideast war, and the Palestinians want it to form the main part of their future state.

That's not on the table.

Israel's political system is dominated by right-wing parties that view the West Bank as an integral part of Israel. Even if Lapid, who supports a two-state solution, manages to form a government after Nov. 1 elections - which recent polls suggest is unlikely - his coalition would almost certainly rely on some hard-line parties.

It's often argued that even if economic measures do not lead to a political solution, they still promote stability - but history hasn't borne that out.

In the 1980s, nearly half of Gaza's labor force was employed in Israel and workers could travel in and out with ease. Hamas, which opposes Israel's existence, burst onto the scene in 1987 with the outbreak of the first Palestinian intifada, or uprising against Israeli rule. The second Palestinian uprising, in 2000, also erupted during a period of relative prosperity.

The Gaza permits, the first to be issued since the Hamas takeover, appear to provide a powerful incentive for the group to maintain calm, as any rocket fire could cause thousands of people to lose good-paying jobs. Then again, conflict between Israel and Hamas has always come at a staggering cost to Palestinians.

In the West Bank, where far more Palestinians have the coveted permits, a recent wave of violence has brought deadly attacks inside Israel and near-daily military raids.

A recent poll conducted by the Palestinian Center for Policy and Survey Research found that 65% of Palestinians support the so-called confidence-building measures, including the issuing of permits. The survey included 1,270 Palestinians from across the West Bank and Gaza, with a margin of error of 3 percentage points.

But the same poll also found some striking measures of despair: Support for a two-state solution dropped from 40% to 28% in just three months, and 55% of those surveyed support "a return to confrontations and armed intifada."



To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
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To Get Their Own Cash, People in Gaza Must Pay Middlemen a 40% Cut

A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)
A destroyed branch of the Bank of Palestine in the Tal al-Hawa neighborhood of Gaza City is seen Wednesday, July 9, 2025. (AP)

Cash is the lifeblood of the Gaza Strip’s shattered economy, and like all other necessities in this war-torn territory — food, fuel, medicine — it is in extremely short supply.

With nearly every bank branch and ATM inoperable, people have become reliant on an unrestrained network of powerful cash brokers to get money for daily expenses and commissions on those transactions have soared to about 40%.

"The people are crying blood because of this," said Ayman al-Dahdouh, a school director living in Gaza City. "It’s suffocating us, starving us."

At a time of surging inflation, high unemployment and dwindling savings, the scarcity of cash has magnified the financial squeeze on families — some of whom have begun to sell their possessions to buy essential goods.

The cash that is available has even lost some of its luster. Palestinians use the Israeli currency, the shekel, for most transactions. Yet with Israel no longer resupplying the territory with newly printed bank notes, merchants are increasingly reluctant to accept frayed bills.

Gaza’s punishing cash crunch has several root causes, experts say.

To curtail Hamas’ ability to purchase weapons and pay its fighters, Israel stopped allowing cash to enter Gaza at the start of the war. Around the same time, many wealthy families in Gaza withdrew their money from banks and then fled the territory. And rising fears about Gaza’s financial system prompted foreign businesses selling goods into the territory to demand cash payments.

As Gaza’s money supply dwindled and civilians’ desperation mounted, cash brokers' commissions — around 5% at the start of the war — skyrocketed.

Someone needing cash transfers money electronically to a broker and moments later is handed a fraction of that amount in bills. Many brokers openly advertise their services, while others are more secretive. Some grocers and retailers have also begun exchanging cash for their customers.

"If I need $60, I need to transfer $100," said Mohammed Basheer al-Farra, who lives in southern Gaza after being displaced from Khan Younis. "This is the only way we can buy essentials, like flour and sugar. We lose nearly half of our money just to be able to spend it."

In 2024, inflation in Gaza surged by 230%, according to the World Bank. It dropped slightly during the ceasefire that began in January, only to shoot up again after Israel backed out of the truce in March.

Cash touches every aspect of life in Gaza

About 80% of people in Gaza were unemployed at the end of 2024, according to the World Bank, and the figure is likely higher now. Those with jobs are mostly paid by direct deposits into their bank accounts.

But "when you want to buy vegetables, food, water, medication -- if you want to take transportation, or you need a blanket, or anything — you must use cash," al-Dahdouh said.

Shahid Ajjour’s family has been living off of savings for two years after the pharmacy and another business they owned were ruined by the war.

"We had to sell everything just to get cash," said Ajjour, who sold her gold to buy flour and canned beans. The family of eight spends the equivalent of $12 every two days on flour; before the war, that cost less than $4.

Sugar is very expensive, costing the equivalent of $80-$100 per kilogram (2.2 pounds), multiple people said; before the war, that cost less than $2.

Gasoline is about $25 a liter, or roughly $95 a gallon, when paying the lower, cash price.

Bills are worn and unusable

The bills in Gaza are tattered after 21 months of war.

Money is so fragile, it feels as if it is going to melt in your hands, said Mohammed al-Awini, who lives in a tent camp in southern Gaza.

Small business owners said they were under pressure to ask customers for undamaged cash because their suppliers demand pristine bills from them.

Thaeir Suhwayl, a flour merchant in Deir al-Balah, said his suppliers recently demanded he pay them only with brand new 200-shekel ($60) bank notes, which he said are rare. Most civilians pay him with 20-shekel ($6) notes that are often in poor condition.

On a recent visit to the market, Ajjour transferred the shekel equivalent of around $100 to a cash broker and received around $50 in return. But when she tried to buy some household supplies from a merchant, she was turned away because the bills weren’t in good condition.

"So the worth of your $50 is zero in the end," she said.

This problem has given rise to a new business in Gaza: money repair. It costs between 3 and 10 shekels ($1-$3) to mend old bank notes. But even cash repaired with tape or other means is sometimes rejected.

People are at the mercy of cash brokers

After most of the banks closed in the early days of the war, those with large reserves of cash suddenly had immense power.

"People are at their mercy," said Mahmoud Aqel, who has been displaced from his home in southern Gaza. "No one can stop them."

The war makes it impossible to regulate market prices and exchange rates, said Dalia Alazzeh, an expert in finance and accounting at the University of the West of Scotland. "Nobody can physically monitor what’s happening," Alazzeh said.

A year ago, the Palestine Monetary Authority, the equivalent of a central bank for Gaza and the West Bank, sought to ease the crisis by introducing a digital payment system known as Iburaq. It attracted half a million users, or a quarter of the population, according to the World Bank, but was ultimately undermined by merchants insisting on cash.

Israel sought to ramp up financial pressure on Hamas earlier this year by tightening the distribution of humanitarian aid, which it said was routinely siphoned off by militants and then resold.

Experts said it is unclear if the cash brokers’ activities benefit Hamas, as some Israeli analysts claim.

The war has made it more difficult to determine who is behind all sorts of economic activity in the territory, said Omar Shabaan, director of Palthink for Strategic Studies, a Gaza-based think tank.

"It's a dark place now. You don't know who is bringing cigarettes into Gaza," he said, giving just one example. "It's like a mafia."

These same deep-pocketed traders are likely the ones running cash brokerages, and selling basic foodstuffs, he said. "They benefit by imposing these commissions," he said.

Once families run out of cash, they are forced to turn to humanitarian aid.

Al-Farra said that is what prompted him to begin seeking food at an aid distribution center, where it is common for Palestinians to jostle over one other for sacks of flour and boxes of pasta.

"This is the only way I can feed my family," he said.