As the occupied West Bank teeters on the brink of economic collapse, the international community is growing increasingly concerned about the devastating consequences for Palestinians and the long-term viability of a two-state solution. A recent report from the International Crisis Group paints a stark picture of an economy in free fall, with real GDP shrinking by nearly 23% since October 2023, and over 300,000 jobs lost.
The economic pressure has intensified dramatically since Hamas's attacks on 7 October 2023, with the Palestinian Authority struggling to cope. Employees have been receiving only half their salaries, partly due to Israel withholding customs revenues it collects on behalf of the PA. Restrictions on movement within the West Bank have further tightened, crippling agriculture, employment, and local businesses, while fragmenting the economy.
Escalating violence in the region has compounded the economic challenges, with Unicef labelling the 'ceasefire' in Gaza a 'cruel and deadly illusion'. Since October, over 1,000 Palestinians have been killed, including 265 children. In the West Bank, former Israeli prime ministers and security chiefs have signed a letter accusing the current government of failing to address 'Jewish terror', while Ehud Olmert has accused Israel of an 'organised, systematic, state-funded campaign of ethnic cleansing and crimes against humanity'.
The UK is also grappling with concerns about its own role in the conflict. An investigation by a rights group suggests Israeli exporters may be concealing the origin of produce from occupied Palestine to benefit from unlawful tax breaks, while an Israeli real estate event held in London reportedly advertised land within settlements. Labour MP Melanie Ward has stated that charities in England and Wales have donated at least £28 million to such settlements, prompting an investigation by the Charity Commission.
With growing calls for more decisive action from the UK and its allies, critics argue that current sanctions against violent settlers are insufficient. Members of Parliament are pressing for measures including a potential ban on trade with illegal settlements. The Foreign, Commonwealth & Development Office advises against all but essential travel to the West Bank due to the volatile security situation.
Israeli finance minister Bezalel Smotrich's recent comments, in which he expressed support for 'transfer' – or forced relocation of Palestinians – have added fuel to the fire. Amidst this backdrop, the UK is under increasing pressure to take more substantive action to address the humanitarian crisis and prevent further destabilisation in the region.