A SIEGE moat brimming with sewage and snow-melt flows west of Salem, sealing off its 5,000 impoverished Palestinian inhabitants from the surrounding area.

Around the rest of the village, an earthen scar dug by Israeli bulldozers cuts through some of the most fertile olive-growing fields in the West Bank, making all vehicle access impossible and forcing Palestinians in checkered keffiyehs and their headscarved wives to trudge single file along the one path to Nablus, which is guarded by an Israeli tank and armoured Jeep.

These are graphic manifestations of Ariel Sharon’s “security-first” policies that the United Nations and World Bank identified yesterday as the most damaging factor in the slow strangulation of the Palestinian economy over 2½ years of the intifada.

Israel insists that the “closures” are vital to prevent exactly the sort of suicide bombing that killed more than a dozen Israelis at a bus stop in Haifa yesterday, the first such attack for nearly two months. Palestinians lament that the daily restrictions and humiliations serve only to recruit suicide bombers for Hamas and other groups that feed off hatred and resentment.

Although less spectacular than the damage wreaked on Palestinian towns by armoured bulldozers and Apa-che helicopters, in 27 months the closures have reduced by $5.4 billion (£3.4 billion) the Palestinian national income, far more, in fact, than the estimated $728 million in physical damage to roads, infrastructure and Palestinian Authority buildings, a joint World Bank/UN report said yesterday.

“The Palestinian economy is devastated. The public sector — on life support. The private sector — rapidly deteriorating. The population’s sources of livelihood — disappearing,” Terje Roed-Larsen, the UN special envoy to the region, said.

He acknowledged Israel’s security concerns over attacks such as yesterday’s bomb, which happened less than two hours after the report was issued, but said, nevertheless, that only a political solution negotiated by the two sides would stop the cycle of violence that was inflicting human misery and economic hardship to the heavily interdependent Israeli and Palestinian economies.

Nigel Roberts, the World Bank’s director for the West Bank and Gaza, said that 60 per cent of Palestinians now live under the $2-a-day poverty line, against 25 per cent five years ago, that unemployment exceeds 50 per cent and national income per head is nearly half that before the intifada. He said that the Palestinian economy would need a minimum of $1.1 billion international assistance this year alone.

As night fell in Salem, the darkness illuminated by spotlights from surrounding Jewish settlements, villagers confirmed one of the report’s key findings: that the nearly 70 per cent of families shut off from their previous jobs in Israel and nearby Nablus were now utterly dependent on the salaries of 125,000 Palestinian Authority teachers, civil servants and security forces, who have been paid throughout the intifada with Arab and European Union donor money, the latter to the tune of $10 million a month.

In the village, everyone has a tale of hardship inflicted by Israel, amid complaints that local industry and agriculture have died because it is no longer possible to bring vegetables to market, or to bring flour, petrol, diesel or animal feed into the town other than by carrying them over the security ditch. Many complain that the ditch dug nine months ago cut them off from olive and wheatfields that they can no longer reach without risking being shot from newly built Israeli watchtowers that sit on top of nearby hills.

Abdul Khalek Jabour, whose land was seized to build such a watchtower 20 paces from his house, said that his flock of 500 chickens was killed when Israeli soldiers suddenly appeared from behind his house and fired teargas just as they were loading the birds on to a flatbed truck, suffocating the caged birds.

“For two years we have been isolated from the whole world, even from other villages,” Mr Jabour said. “Everybody has to be in their homes by 6pm, and the Israeli patrols come around every day to check. It is worse than a prison.”

Explore World News

• World Agenda

• Iraq News

• US & Americas News

• Europe News

• Middle East News

• Afghanistan News

• Asia News

• Africa News

• Ireland News

Times Recommends

• A doctor, a daughter and a man called Johnny
• Mona Lisa's smile may belie ill health
• ‘Parasite economy’ lies behind Greek tragedy