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‘Operation Al-Aqsa Flood’ Day 120: Gaza’s Economy In Shambles

Above photo: Deir Al-Balah, Central Gaza, February 1, 2024. Naaman Omar/APA Images.

Amid Fears Of Escalating Regional Tensions.

Hamas leaders continue to deliberate a ceasefire agreement as the U.S. intensifies strikes on Iran-affiliated targets in Iraq and Syria.


  • 27,238+ Palestinians have been killed in Gaza, and at least 66,452 have been wounded.
  • 107 Palestinians have been killed and 165 injured during the past 24 hours.

Key Developments

  • Top Hamas leaders continue to debate U.S.-backed ceasefire proposal that would lead to six-week cessation of hostilities.
  • Israeli military prepares incursion into Rafah, where 1.9 people currently shelter.
  • United Nations Conference on Trade and Development (UNCTAD) says the Gaza Strip has witnessed “unprecedented levels of destruction” and will not recover 2022 GDP levels until 2092.
  • United Arab Emirates (UAE) allocates $5 million to support UNWRA, fund reconstruction in Gaza.
  • U.S. Central Command hits 85 Hezbollah targets in Syria and Iraq in retaliation against “Iran-affiliated” fighters responsible for death of three U.S. service members in Jordan.
  • Iraqi and Syrian officials condemn U.S. aggression; Hamas condemns attacks on Syria, Iraq in “strongest terms.” Iran calls U.S. attacks a “strategic error.”
  • According to analysts, ceasefire in Gaza key to deescalating regional tensions between U.S. and Iran

UNCTAD: Gaza Economy Will Need Decades And Billions Of Dollars To Recover

Top Hamas leaders are still debating a US-backed ceasefire proposal that would facilitate a six-week cessation of hostilities for the delivery of humanitarian aid into Gaza and the release of Israeli civilian hostages. While Qatar claims that Hamas has received the proposal “positively,” key Hamas officials are asking for more concessions, most importantly including a permanent ceasefire, before signing off on the proposal.

Most people in Gaza do not have time to wait; the Israeli military prepares a military incursion into Rafah, Gaza’s southernmost district on the Egyptian border, where 1.9 million Gazans are currently sheltering.

Even if a ceasefire were to be put in place immediately, a recently released preliminary assessment from the United Nations Conference on Trade and Development (UNCTAD) has found that Gaza’s economy will need decades and billions of dollars in foreign investment to recover, and — even in the best of circumstances — will not recover its 2022 GDP levels until 2092.

Yet even before October 7, Gaza’s economy was already in a dire position, with 45 percent of the workforce unemployed and two-thirds of the population living in poverty. During the past four months, unemployment has surged to more than 79 percent, and 80 percent of the population is dependent on international aid.

Many Palestinians are dependent on UNRWA — which is now facing a crisis as the United States and eight other countries have withdrawn funding to the agency following allegations that 12 UNRWA staff members were involved in the October 7 Hamas attacks. The United Arab Emirates (UAE) has recently allocated $5 million to support the organization; without new funding, the agency has said that it might have to suspend operations in Palestine and other countries by the end of February.

“To put it very simply and bluntly: our humanitarian response for the Occupied Palestinian Territory is dependent, completely dependent on UNWRA being adequately funded and operational,” UN aid chief Martin Griffiths told the UN Security Council earlier this week.

According to the United Nations Conference on Trade and Development’s assessment, it is not enough to go back to the pre-conflict status quo. Instead, the “vicious cycle” of destruction and partial reconstruction must be broken, and the blockade must be lifted.

“If Gaza is to remerge with a viable economy, the military confrontation should end immediately, and reconstruction should begin in earnest and without delay,” the report recommended. “The international community needs to act now before it is too late.”

Analysts: Gaza Ceasefire Essential To Regional De-Escalation

At least sixteen people have been killed in U.S. strikes against Iraq, as the U.S. escalates retaliatory strikes against Iran-affiliated targets in both Iraq and Syria, following the death of three U.S. service members in Jordan.

While the U.S. Central Command (CENTCOM) describes the escalation as airstrikes that used 125 precision munitions to hit more than 85 Iran-affiliated targets, including but not limited to Islamic Revolutionary Guard Corps (IRGC) command and control operations centers and weapons storage facilities. Both Iraqi and Syrian leaders have condemned the attacks, which they claim killed civilians.

“These airstrikes constitute a violation of Iraqi sovereignty, undermine the efforts of the Iraqi government and pose a threat that could lead Iraq and the region into disastrous consequences,” said Yahya Rasool, a spokesman for Iraq’s Prime Minister. The Iraqi government denies claims that the U.S. coordinated with Baghdad ahead of the attack, while Hamas has condemned the attack in the “strongest terms.”

Meanwhile, Iran has called the attacks a “strategic error” that violates the sovereignty and territorial integrity of Iraq and Syria and international law, and is a clear violation of the United Nations Charter.

“The attacks merely support the goals of the Zionist regime. Such attacks increasingly involve the U.S. government in the region and overshadow the crimes of the Zionist regime in Gaza,” Iran’s Ministry of Foreign Affairs spokesperson Nasser Kanaani said in a statement, going on to state that the “roots” of the tension and crisis in the region go back to Israel’s occupation, and the continued genocide of the Palestinian people.

“The continuation of such adventures is a threat to regional and international peace and security.”

While Joe Biden has maintained that the goal of the strikes is not war with Iran, but an end to attacks on U.S. personnel from Iran-affiliated actors.

But many analysts fear that, if left unchecked, the escalating exchange of violence could lead to a regional conflagration, and that a ceasefire in Gaza is therefore central to deescalating the tensions and avoiding the possibility of a proxy war.

“The United States has hitherto failed to apply any real leverage in order to bring a ceasefire to Gaza, which I think would really diminish the tensions in the region and remove the fuel for this sort of escalation taking place,” HA Hellyer, a military analyst at the UK-based Royal United Services Institute, told Al Jazeera.

“There is something called the law of unintended consequences,” he continued. “If you continue on this trend of escalation, you have no idea where it will go.”

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