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West Bank Economy in Tatters as Gaza War Rages

Hafeth Ghazawneh says his income has plummeted from around 7,000 shekels ($1,850) per month to just 2,000 ($530). - AFP
Hafeth Ghazawneh says his income has plummeted from around 7,000 shekels ($1,850) per month to just 2,000 ($530). - AFP
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West Bank Economy in Tatters as Gaza War Rages

Hafeth Ghazawneh says his income has plummeted from around 7,000 shekels ($1,850) per month to just 2,000 ($530). - AFP
Hafeth Ghazawneh says his income has plummeted from around 7,000 shekels ($1,850) per month to just 2,000 ($530). - AFP

In the occupied West Bank, Hafeth Ghazawneh waits in quiet frustration for customers to visit his falafel stall, which has been deserted since the October 7 Hamas attacks in Israel.

His breakfast and lunch offerings were popular with craftsmen from workshops near Al-Bireh, the twin city of Ramallah, before the Israel-Hamas war broke out.

"Now they're bringing their meals from home because the situation is so difficult," Ghazawneh tells AFP, fearing he will have to shut up shop if the war in the Gaza Strip continues.

Ghazawneh says his income has plummeted from around 7,000 shekels ($1,850) per month to just 2,000 ($530).

His worsening situation reflects the current status of the West Bank economy, which is in tatters as the war in Gaza rages.

The conflict erupted after Hamas militants attacked southern Israel on October 7. Israel's blistering retaliation has killed at least 24,448 people, around 70 percent of them women, children and adolescents, according to the Hamas government's health ministry in Gaza.

The World Bank has estimated the West Bank's GDP could fall by six percent this year, while the International Labor Organization said 32 percent of jobs have already been lost.

The unemployment rate has skyrocketed to 30 percent, up from 14 percent before the war, according to Taher al-Labadi, a researcher at the French Institute for the Near East (Ifpo).

Israel has also withdrawn 130,000 work permits from Palestinians in the West Bank, leaving many with no source of income.

The three million Palestinians living in the West Bank, which Israel has occupied since 1967, cannot travel to Israel without a permit.

Bishara Jubran, manager of a household products and cosmetics factory in Ramallah, considers himself lucky because he has been able to keep all 70 of his employees on the books.

But his business has stopped producing soaps made from Dead Sea ingredients which he used to sell to hotels.

As the war rages and visitors stay away, he estimates his losses at $200,000 last year.

He keeps his factory afloat by selling washing powder and other household products on the Palestinian market.

But none of his goods are allowed into Gaza, a key market that used to make up 20 percent of his sales.

In the West Bank, transport costs have increased because of a growing number of checkpoints and the sealing off of certain towns by the Israeli army, Bishara says.

"Many times the truck leaves and it takes them like four or five hours to reach... the north in Nablus to find out that he cannot enter the city. So he just comes back," he says.

Now he makes a delivery every two or three days, down from two a day before the war.

Such factors have led to a contraction of the economy, which is now operating at 50 percent of its capacity, according to Abdo Idris, president of the Palestinian Chamber of Commerce.

The Palestinian economy was already "asphyxiated" and highly dependent on Israel before the war, researcher Labadi says.

Under the Oslo Accords of the 1990s, it was agreed that a political status quo would be maintained and Palestinians were promised economic development.

But this status quo was undermined by Israel's "colonization of the West Bank", Labadi says, lamenting that Palestinian economic development "did not take place".

As a result, in times of crisis, the increasingly fragile Palestinian economy finds itself "deprived of all its resources and with a very limited capacity for resilience", he says.

Israel controls the borders of the West Bank and collects taxes on Palestinian products, which it must then pass on to the Palestinian Authority.

But since October 7, those taxes have not been paid.

As of December, Israel had not paid two billion shekels in taxes imposed on Palestinian products, according to the Palestinian finance ministry.

The Palestinian Authority has struggled to pay public servants since the taxes were withheld.

Civil servants told AFP their salaries for December have still not been paid.

In October, they received 50 percent of their wages, and 65 percent in November.

"The fear of the unknown is killing us," Jubran says. "We don't know if we'll be able to go to work tomorrow."

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The Fragile Israel-Hezbollah Truce is Holding so Far, Despite Violations

Mariam Kourani removes a toy car from the rubble of her destroyed house after returning with her family to the Hanouiyeh village in southern Lebanon, on Nov. 28, 2024, following a ceasefire between Israel and Hezbollah. (AP Photo/Hussein Malla, File)
Mariam Kourani removes a toy car from the rubble of her destroyed house after returning with her family to the Hanouiyeh village in southern Lebanon, on Nov. 28, 2024, following a ceasefire between Israel and Hezbollah. (AP Photo/Hussein Malla, File)
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The Fragile Israel-Hezbollah Truce is Holding so Far, Despite Violations

Mariam Kourani removes a toy car from the rubble of her destroyed house after returning with her family to the Hanouiyeh village in southern Lebanon, on Nov. 28, 2024, following a ceasefire between Israel and Hezbollah. (AP Photo/Hussein Malla, File)
Mariam Kourani removes a toy car from the rubble of her destroyed house after returning with her family to the Hanouiyeh village in southern Lebanon, on Nov. 28, 2024, following a ceasefire between Israel and Hezbollah. (AP Photo/Hussein Malla, File)

A fragile ceasefire between Israel and the Lebanon's Hezbollah has held up for over a month, even as its terms seem unlikely to be met by the agreed-upon deadline.

The deal struck on Nov. 27 to halt the war required Hezbollah to immediately lay down its arms in southern Lebanon and gave Israel 60 days to withdraw its forces there and hand over control to the Lebanese army and UN peacekeepers.

So far, Israel has withdrawn from just two of the dozens of towns it holds in southern Lebanon. And it has continued striking what it says are bases belonging to Hezbollah, which it accuses of attempting to launch rockets and move weapons before they can be confiscated and destroyed, The AP reported.

Hezbollah, which was severely diminished during nearly 14 months of war, has threatened to resume fighting if Israel does not fully withdraw its forces by the 60-day deadline.

Yet despite accusations from both sides about hundreds of ceasefire violations, the truce is likely to hold, analysts say. That is good news for thousands of Israeli and Lebanese families displaced by the war still waiting to return home.

“The ceasefire agreement is rather opaque and open to interpretation,” said Firas Maksad, a senior fellow with the Middle East Institute in Washington. That flexibility, he said, may give it a better chance of holding in the face of changing circumstances, including the ouster of Syria's longtime leader, Bashar Assad, just days after the ceasefire took effect.

With Assad gone, Hezbollah lost a vital route for smuggling weapons from Iran. While that further weakened Hezbollah’s hand, Israel had already agreed to the US-brokered ceasefire.

Hezbollah began firing rockets into Israel on Oct. 8, 2023 — the day after Hamas launched a deadly attack into Israel that ignited the ongoing war in Gaza. Since then, Israeli air and ground assaults have killed more than 4,000 people in Lebanon, including hundreds of civilians. At the height of the war, more than 1 million Lebanese people were displaced.

Hezbollah rockets forced some 60,000 from their homes in northern Israel, and killed 76 people in Israel, including 31 soldiers. Almost 50 Israeli soldiers were killed during operations inside Lebanon.

Here’s a look at the terms of the ceasefire and its prospects for ending hostilities over the long-term.

What does the ceasefire agreement say? The agreement says that both Hezbollah and Israel will halt “offensive” military actions, but that they can act in self-defense, although it is not entirely clear how that term may be interpreted.

The Lebanese army is tasked with preventing Hezbollah and other militant groups from launching attacks into Israel. It is also required to dismantle Hezbollah facilities and weapons in southern Lebanon — activities that might eventually be expanded to the rest of Lebanon, although it is not explicit in the ceasefire agreement.

The United States, France, Israel, Lebanon and the UN peacekeeping force in Lebanon, known as UNIFIL, are responsible for overseeing implementation of the agreement.

“The key question is not whether the deal will hold, but what version of it will be implemented,” Maksad, the analyst, said.

Is the ceasefire being implemented? Hezbollah has for the most part halted its rocket and drone fire into Israel, and Israel has stopped attacking Hezbollah in most areas of Lebanon. But Israel has launched regular airstrikes on what it says are militant sites in southern Lebanon and in the Bekaa Valley.

Israeli forces have so far withdrawn from two towns in southern Lebanon - Khiam and Shamaa. They remain in some 60 others, according to the International Organization for Migration, and around 160,000 Lebanese remain displaced.

Lebanon has accused Israel of repeatedly violating the ceasefire agreement and last week submitted a complaint to the UN Security Council that says Israel launched some 816 “ground and air attacks” between the start of the ceasefire and Dec. 22, 2024.

The complaint said the attacks have hindered the Lebanese army's efforts to deploy in the south and uphold its end of the ceasefire agreement.

Until Israel hands over control of more towns to the Lebanese army, Israeli troops have been destroying Hezbollah infrastructure, including weapons warehouses and underground tunnels. Lebanese authorities say Israel has also destroyed civilian houses and infrastructure.

What happens after the ceasefire has been in place for 60 days? Israel's withdrawal from Lebanese towns has been slower than anticipated because of a lack of Lebanese army troops ready to take over, according to Lt. Col. Nadav Shoshani, a military spokesman. Lebanon disputes this, and says it is waiting for Israel to withdraw before entering the towns.

Shoshani said Israel is satisfied with the Lebanese army's control of the areas it has already withdrawn from, and that while it would prefer a faster transfer of power, security is its most important objective.

Israel does not consider the 60-day timetable for withdrawal to be “sacred,” said Harel Chorev, an expert on Israel-Lebanon relations at Tel Aviv University who estimates that Lebanon will need to recruit and deploy thousands more troops before Israel will be ready to hand over control.

Hezbollah officials have said that if Israeli forces remain in Lebanon 60 days past the start of the ceasefire, the militant group might return to attacking them. But Hezbollah Secretary General Naim Kassem said Wednesday that, for now, the group is holding off to give the Lebanese state a chance to "take responsibility” for enforcing the agreement.

Over the final two months of the war, Hezbollah suffered major blows to its leadership, weapons and forces from a barrage of Israeli airstrikes, and a ground invasion that led to fierce battles in southern Lebanon. The fall of Assad was another big setback.

“The power imbalance suggests Israel may want to ensure greater freedom of action after the 60-day period,” Maksad, the analyst, said. And Hezbollah, in its weakened position, now has a “strong interest” in making sure the deal doesn't fall apart altogether “despite Israeli violations,” he said.

While Hezbollah may not be in a position to return to open war with Israel, it or other groups could mount guerilla attacks using light weaponry if Israeli troops remain in southern Lebanon, said former Lebanese army Gen. Hassan Jouni. And even if Israel does withdraw all of its ground forces, Jouni said, the Israeli military could could continue to carry out sporadic airstrikes in Lebanon, much as it has done in Syria for years.