ARAB ISRAELI RELATIONS - Sept 19 - Israel Declares Gaza An 'Enemy Entity'.

Israeli cabinet ministers vote unanimously to declare the Gaza Strip an "enemy entity" a move that could see it shut off fuel and power to the 1.4m Palestinians in the impoverished enclave if rocket attacks continue. Since June the territory where 40% of Palestinians live has been ruled exclusively by the islamist movement Hamas and its borders have been open only for humanitarian aid. Israel's new sanctions, which US State Sec Condoleezza Rice on a visit to Jerusalem, said are also backed by Washington are expected to further cripple the Palestinian economy by tightening restrictions on people's movement and access. The Gaza Strip will be left dependent on international aid. The move by Ehud Olmert's administration shows exasperation with continued Palestinian rocket attacks into Israel. Three dozen young soldiers were wounded last week when rockets struck their base, sparking a public outcry for retaliatory action. But a recent World Bank report predicts that continuing to seal Gaza's border crossings, as the Israeli security cabinet threatens to do with declaration, will put 30,000 private sector jobs at risk. Gradual sanctions, imposed by Israel in stages if the rockets do not stop, would allow in only enough fuel to power electrical generators at Gaza hospitals. The borders would be opened only for essential food and medical supplies. Water supplies would continue flowing at present levels, however. Lawyers also advised the cabinet that any disruption in electricity should be restricted, to avoid violating international law by inflicting collective punishment on the civilian population. More than half the Gazan population is under 15 years of age. Despite Israeli air strikes and Israeli Defence Forces forays to root out the rocket launchers, which have killed a dozen people in seven years and terrified thousands of citizens in Sderot, in south Israel, homemade rockets rain down almost daily on Israeli soil. Tzahi Hanegbi, defence committee chairman, told Israel's Army Radio there was no need to "pamper" Gazans with fuel and electricity, and that a new incursion into the strip was inevitable. Olmert and the military were initially reluctant to take these hardline steps and risk international censure. Israel refuses to co-ordinate the supply of essential resources with Hamas because it considers the political party a terrorist group that sponsors suicide bombings and refuses to recognise Israel's right to exist. "They aim to starve our people and force them to accept humiliating formulas that could emerge from the so-called November peace conference", said Fawzi Barhoum, a Hamas spokesman, referring to a US-sponsored meeting scheduled to be held in Washington this autumn. Even though the international embargo on the emergency Palestinian government in the West Bank were lifted, a $1.62 bn ([pounds sterling]807m) aid package is needed to close its fiscal gap. Since Hamas took control of Gaza in June, just 15 truckloads of vegetables have made it through Israeli checkpoints. A shortage of raw materials, ranging from computer chips to bags of cement, hinders any productive industry and the development of an export economy inside Gaza While acknowledging Israel's security concerns, the World Bank says these are difficult to reconcile with the continued "protection and expansion" of Jewish settlement activity in the West Bank, which forces the Palestinian Authority to administer disconnected enclaves rather than a contiguous second state. The report concluded that, even in the face of ongoing conflict, economic development in the Palestinian territories must proceed, however '' risky and politically costly" such action might be.