Israel’s war in Gaza has created a “human-made abyss”, and reconstruction is likely to cost more than $70bn (£53bn) over several decades, the United Nations has said.
The UN’s trade and development agency (Unctad) said in a report that Israel’s military operations had “significantly undermined every pillar of survival” and that the entire population of 2.3 million people faced “extreme, multidimensional impoverishment”.
The report said Gaza’s economy had contracted by 87% over the course of 2023-2024, leaving its gross domestic product (GDP) per capita at just $161, among the lowest globally.
The report also found that “violence, accelerated settlement expansion and restrictions on worker mobility” hd “decimated the economy” in the West Bank.
“Plummeting revenues and the withholding of fiscal transfers by the Israeli government have severely constrained the Palestinian government’s ability to maintain essential public services and invest in recovery,” it said. “This comes at a critical time when massive spending is needed to rebuild shattered infrastructure and address worsening environmental and socioeconomic crises.”
The report found that the steepest economic contraction on record had wiped out decades of progress across the West Bank and Gaza.
“By the end of 2024, Palestinian GDP fell back to its 2010 level while GDP per capita returned to that of 2003, erasing 22 years of development progress in less than two years,” it said.
“Even with substantial aid, recovery to pre-October 2023 GDP levels could take decades.”
A US-brokered ceasefire between Israel and Hamas came into effect in October after two years of hostilities, and though fragile it has held. The Gaza health ministry said on Monday that at least 342 Palestinians had been killed by Israeli fire since the start of the truce. Israel says three of its soldiers have been killed by militant gunfire in the same period.
Hamas and Islamic Jihad, a smaller allied militant faction, said on Tuesday that they were preparing to hand over the remains of another Israeli hostage in line with the terms of the ceasefire deal. A spokesperson for Islamic Jihad said the body of the hostage had been found on Monday during search operations in central Gaza.
Israel said the delay in handing over the remains was a violation of the ceasefire.
There is little clarity about how the challenges of implementing the more immediate requirements of Donald Trump’s 20-point plan for Gaza will be met, let alone longer-term questions of reconstruction.
The two-year war in Gaza was triggered when Hamas-led militants killed about 1,200 people, mostly civilians, and abducted 251 during a surprise incursion into Israel on 7 October 2023. More than 69,000 Palestinians, mostly civilians, were killed in the ensuing Israeli offensive and in strikes since the ceasefire. The bodies of thousands more remain under the rubble.
Conditions in Gaza, which has been effectively split since the ceasefire with Israeli military forces controlling just over half of the territory, are extremely difficult.
In its most recent update, the World Food Programme (WFP) said most households in Gaza were unable to afford basic food items. It said prices had dropped steeply in recent weeks, but the quantity of food consumed daily was still well below pre-war levels.
Diets are dominated by cereals, pulses and moderate amounts of dairy and oil, with very limited meat, vegetables and fruit, the WFP said, while cooking gas was scarce, forcing many families to rely on burning discarded plastic or other alternative fuels to cook.
Since the start of the ceasefire, Hamas has released all the 20 living hostages it was holding and returned the remains of all but three of the 25 dead hostages. In exchange, Israel has released nearly 2,000 prisoners in its custody and returned the bodies of hundreds of dead Palestinians.
The UN security council gave formal backing last week to Trump’s plan, which calls for an interim technocratic Palestinian government in Gaza, overseen by an international “board of peace” and backed by an international security force.
