Trade revives as Palestinian cities reconnect

Businesses in normal countries take getting around for granted. They can distribute, export and attract workers and customers from wide areas.In the Israeli-occupied West Bank, access to more than half of the land is restricted. Israel has ultimate control of roads, energy, water, telecommunications and air space.An Israeli barrier of fence and concrete wall now seals off much of the West Bank. At a handful of crossing points, freight heading for the Jewish state is screened for security.A decade of what the Palestinians call "closure" created higher transaction costs, uncertainty and inefficiency.But violence has fallen significantly. The Palestinians have established an effective security force, with American help.Israeli Prime Minister Benjamin Netanyahu says that in addition to the classic, top-down peace process, he can build peace from the bottom up by boosting the Palestinian economy.This northern city was the West Bank's commercial hub until the Palestinian uprising that began in 2000 when it was virtually sealed off by the Huwara checkpoint, known for years as one of the toughest in the occupied territory.In the past five years 425 companies left for Ramallah to escape the economic siege, according to Omar Hashem of the Nablus Chamber of Commerce.The economy of this volatile city, where Israeli settlers occupy homes near a Jewish religious site under army protection, shows little sign of improvement, say some local businessmen.This city is the envy of the others. As the administrative capital close to Jerusalem in the biggest conurbation of the region, Ramallah benefited from the sense of remoteness felt in cities like Nablus closed off behind Israeli checkpoints.People have moved in and it has grown. There are two international hotels under construction, including a Moevenpick which was mothballed for years after the 2000 uprising began.Under what the World Bank calls the "extreme closure" of a tight Israeli blockade, the Mediterranean coastal enclave where 1.5 million Palestinians live is now all but divorced from the economy of the West Bank.

Its public sector is paid from foreign aid cash trucked in by security vans. It gets much of its food and energy in United Nations and European Union aid, and some it brought in commercially under Israeli inspection.Most other goods are supplied by a smuggling industry running tunnels under the border with Egypt.Gaza is controlled by the Islamist Hamas group hostile to the Palestinian leadership in the West Bank and resistant to Western demands that it accept Israel's right to exist and forego armed resistance.Israel launched a military offensive against Hamas last December to stop its forces firing rockets into Israeli territory and over the course of three weeks inflicted enormous damage on the enclave and killed more than 1,000 people.International donors have pledged some $4 billion for Gaza's reconstruction but a ban on the import of cement and steel has prevented the work from starting.