This article explores the economic, political, and social changes in the West Bank and Gaza that have occurred since the beginning of the Oslo process in 1993. It argues that Oslo enabled Israel to control the Palestinian territories through the Palestinian Authority with damaging results that built up into collective disillusionment and rage that finally exploded in the al-Aqsa intifada.
Sara Roy is a research associate at the Center for Middle Eastern Studies at Harvard University. This article emanates from a project supported by a grant from the Research and Writing Initiative of the Program on Global Security and Sustainability of the John D. and Catherine T. MacArthur Foundation.
ON THE EVENING OF 15 NOVEMBER 1988, at the height of the first Palestinian intifada, Yasir Arafat declared a Palestinian state in the West Bank and Gaza Strip at the nineteenth session of the Palestine National Council in Algiers. With this declaration, the Palestinian people formally recognized the State of Israel and, more significantly for them, relinquished their claims to 78 percent of Palestine. For Palestinians, this great and painful compromise meant releasing the past from the present, renouncing an old dream for a new and uncertain one. Yet, in the refugee camps and villages of the Gaza Strip, there was great rejoicing. Every soul in Gaza seemed glued to a radio or television.
I was in Gaza at the time, where I lived off and on during the first intifada. When the declaration was made, my friends stood up and screamed with joy. People wept, not for what they had given up but for what they hoped to gain. Children danced and clapped and asked for chocolates. The two-room shelter of the friends with whom I was staying was too small to contain the people and their emotions. Despite the dangers of venturing out in the night curfew, when even opening a window risked punishment, everyone poured outside, bursting into the dense blackness of the camp. People congratulated and embraced each other. Some began singing. To my amazement, even the Israeli army did nothing to contain the celebration. The soldiers looked on in stunned disbelief.
Although the optimism quickly gave way to a terrible phase of internal and external violence, the joy and hope returned several years later with the signing of the Oslo agreement. I was in Gaza City when the Israeli army redeployed from the urban areas of the Strip in May 1994. The freedom to walk their streets without fear or harassment left Palestinians ecstatic. That night, Gaza City's main commercial street throbbed with thousands of people, many in their finest clothes. Again, as in 1988, there were dancers and singers. The stores were open, food was free, and children had all the chocolate they wanted. The city was a swirl of light and color.
The images are quite different now. Seven years after the Oslo process began, Palestinians became engulfed in another uprising. During the first intifada from 1987 to 1993, 18,000 Palestinians were injured. In the first five months of the current uprising, the figure was more than 11,000. During my visit to Gaza and the West Bank in January 2001, I saw hundreds of acres of fertile agricultural land made desolate by army bulldozers--razed orchards and fields, destroyed irrigation systems, felled trees, some of them hundreds of years old. I saw apartment buildings, charred and vacant, attacked by Israeli tanks and Apache helicopters, their residents made homeless. I visited camp homes whose walls, ceilings, and furniture were riddled with bullet holes. Children no longer asked for chocolate but for food, and showed their collections of bullets while their mothers brought out shopping bags filled with shrapnel collected from inside and around their homes. An elderly man in one of the camp shelters I visited broke down in tears, struggling to breathe from the rage he felt as he described the attack on his family. His wife took me to their bedroom whose outer wall faces an Israeli settlement and army outpost nearby. "The only reason we are alive," she told me, "is that we were sleeping on the floor when they began shooting." Their bedroom wall has twelve bullet holes, and their closet has two.
During the seven years that separate the two sets of images, the hopes of Oslo were transformed into unrelieved bleakness, not only at the economic level but also at the level of society, where numbed expectations and mocked possibility left anger and bitterness and an undeniable anomie. The "al-Aqsa intifada" that erupted at the end of September 2000 is the product of Oslo's failure: it is the seven years of the "peace process" that created the context for the uprising.
THE OSLO PERIOD (1993-2000): DISSOLUTION OF POLITICAL LIFE 
The hegemonic system imposed by Israel during twenty-six years of direct rule did not disappear with the implementation of the peace process but was maintained, with certain modifications, via the new Palestinian Authority (PA) set up under Oslo. The Israeli government remained the final arbiter of Palestinian life, though its rule was largely mediated by the PA. Instead of a return to political process or consensus, the emergence of an authoritarian state and de facto one-party system opposed to dissent marked the end of any viable political dialectic at the popular level. The depoliticization of society was seen in the continuing disempowerment of the Palestinian Legislative Council and in official control of the media. Political life among Palestinians during this period was no longer characterized by competing ideologies vying for dominance, but by the lack of any political ideology whatsoever.
The Decline of Ideology
With Oslo, the interests of the Palestinian leadership focused on securing political control at the cost of national liberation. This disaffirmation of the Palestinian cause, which impinged on an already troubled civil society, was expressed in many ways, but especially in the growing militarization of society as seen in the overwhelming presence of police, intelligence, and security personnel. Almost half of all PA employees performed some sort of security function, a pattern designed not only to assert control and create dependency but to neutralize potential adversaries. Perhaps the most alarming aspect of this trend was the steady absorption of young people into the PA's security structure. The result of these changes was a striking and unprecedented diminution of nationalist ideology during the Oslo period--the transformation of political activism, for decades so essential to the way Palestinians lived and organized themselves, into popular resignation. This internal "migration" was accompanied by other equally troubling changes, such as the shift from community and notions of the greater good to emphasis on the self and personal survival. Ironically, as the "peace process" progressed, there was a deepening sense that the national dream had ended.
Other manifestations of the new situation were the deliberate disempowerment of institutions, the concentration of power in the hands of Arafat, and the proliferation of political appointees. Allegiance to Arafat rather than technocratic skills quickly became the primary avenue to power and status. Moreover, Palestinian nongovernmental organizations (NGOs), historically the backbone of local development, remained under constant and often hostile pressure from the PA. Thus, pluralism rapidly ceded to statism, bureaucratism, and authoritarianism. Within the context created by Oslo and shaped by the PA, nationalism no longer was measured by support for Palestinian self-determination and political rights, but by support for an expanding security apparatus and patronage structure with little political legitimacy. In this way, political activity, bereft of dream and purpose, aimed to restore order but deny liberty.
During direct Israeli rule, everyone in the Palestinian community had suffered from exclusion. Under the security system and patronage structure created by Arafat, new economic and elite classes emerged with privileges and rights visibly denied all others. The excluded were the majority poor, who arguably had no more access to the system's resources than they did before Oslo. At the same time, the rapidly emerging tensions between the local Palestinians and those who came from outside (the "Tunisians") became the dominant and most fractious social divide. There was never any equality before the law and, perhaps more alarming, no pretense of any.
The Palestinian regime came to be identified with coercion and tyranny--"hamiha haramiha" (its protector is its thief).  Much has been written about the PA's disregard for human rights and the rule of law--the arbitrary arrests, detention without trial, torture, executions, press censorship, repression of union activity, suppression of dissent and most forms of opposition, restrictions on assembly, and so on. It appeared that it was not only an alternative source of power that the leadership feared, but an alternative source of thought. The PA's behavior increasingly was regarded not only as a form of betrayal but as complicity with the Israeli occupation and its policies of separation and isolation.
With the initiation of the peace process, Palestinians had hoped for the establishment of their own state that was not only sovereign, but democratic and inclusive. The realization that this would not occur led at first to shock and confusion, then to alienation and resignation. As time went on, people were less focused on whether there would be a national state than on the government's withdrawal from democratic practice and the seeming impossibility of political reform. Palestinians believed that a state would come, but many increasingly feared the kind of state it would be.
The Reemergence of Tribalism
The trend toward militarization and the weakening of institutions reflect a breakdown in social relations and the values that define them. This breakdown is tied directly to two dynamics imposed by the PA throughout the Oslo period: disregard for the mores and values of Palestinian society and the introduction of unethical codes of conduct governing the functioning of society. Particularly in the more conservative Gaza Strip, the behavior adopted by the PA and its official representatives was found highly offensive. The PA was increasingly held responsible for the corrupting and perverse changes in the norms and values that had come to characterize Palestinian society.
During the intifada, the ways in which we must now behave would have been haram. We fought so hard against it then. The intifada was not only a political battle against the occupation, it was a moral struggle to create a better society. But now, we have no choice. What are we supposed to do? If we don't pay a bribe, we don't get a phone, a license, health insurance, or a job. Those who try to be "good" are lost. People see how the PA cheats and extorts and becomes rich. Why should the poor guy from a refugee camp with many mouths to feed do any better? What is the point in trying to do the right thing when the only reward for doing so is more suffering? The longer-term implications are, of course, frightening but who has time to worry about them when one's children are hungry. 
The perceived lack of choices led to alienation from the new system and a withdrawal from larger society. This involves even the most basic levels, where there has been a weakening of the nuclear family and kinship structures expressed in increasing rates of domestic violence as well as drug use and sexual abuse. Another result has been the emergence of a traumatized, poorly educated, and poorly socialized generation of children who lack respect for authority and the law and who have little experience with restraint or self-discipline. 
At the same time, there has been a waning of affiliation with broader (nongovernmental) social institutions toward more particularistic, tribal forms of organization where the disenfranchised are more likely to find security, identity, and a sense of belonging. In the Gaza Strip, for example, clan violence, a phenomenon that on a wider community level had remained dormant for more than two decades, has become so widespread that a special unit was set up within the Palestinian security services to deal with it.  According to Dr. Eyad El Sarraj, this behavior is reinforced by the PA's reliance on clan politics to rule: in order to get a government job, one has to be from a big clan or belong to Fatah, the ruling party. 
Moreover, in an environment where security forces function above the law, even ignoring decisions of the High Court of Justice, individuals have little choice but to rely on their families for protection and survival.  A similar phenomenon exists in the West Bank, where, given the dysfunctional nature of the justice system, people with either street or economic power began to form their own personal militias. These were used to exact "justice," however defined, to impose punishment for real or perceived offenses, and to offer protection. These militias were not based on political or religious affiliation but, typically, on ties of kinship or friendship with the militia head. In effect, these were gangs, and their heads spanned all socioeconomic classes. In some circumstances these groups were quite effective, offering mechanisms of appeal and protection not available officially.
There is a painful irony in the fact that resort to traditional, nonformal mechanisms of law enforcement, justice, and accountability reemerged with the establishment of the PA and the implementation of the peace process. This social dynamic, which reflects an atomization of social relations, suggests that the notion of a larger collective identity began to weaken and with it a shared basis of coalition building that extends beyond the particularistic level. This kind of social regression, which was actively encouraged by the PA, cannot be easily reversed. To appreciate the social costs, one has only to look at Lebanon.
ECONOMIC DECLINE UNDER OSLO
The period between the start of the peace process and its end was a time of growing economic distress for the majority of Palestinians in the West Bank and Gaza Strip.  Arguably, at no time since the beginning of Israeli occupation in 1967 had the Palestinian economy been as weak and its people as vulnerable as during the seven Oslo years, a tragic irony given the enormous expectations that accompanied the early days of the process.
The economic reality of the Oslo period was defined by two fundamental facts: the continuation of preexisting structures of dependency and underdevelopment and the introduction of new structures, notably closure, that further attenuated an already diminished economic base. Two actors shaped economic conditions during the Oslo period: Israel, the primary actor, and the PA.
Israeli Policies of Continued Denial
During the Oslo period, the economic fundamentals of occupation remained unchanged. Israel retained full control over the Palestinian economy by virtue of its control of key factors of production--land, water, labor, and capital--and of external (and in the West Bank, internal) borders. Furthermore, Israel continued, almost wholly unchallenged, to engage in practices that further dispossessed Palestinians of their lands, their homes, and their livelihoods. From the signing of the Oslo agreement to the start of al-Aqsa intifada, the Israeli government confiscated tens of thousands of acres of Arab land--much of it agricultural land--for Israeli settlement expansion and road building. Similarly, the number of Israeli settlers almost doubled from 1993 to 2000, and 250 miles of settler bypass roads were built on expropriated lands, encircling and truncating them. Palestinians had little recourse against Israeli actions, which since Oslo have been defined as the price of peace rather than as a cause for conflict. Within this construct, the Palestinians' legitimacy in Israel's eyes derived from their willingness to yield to terms that were largely Israeli.
One of the most damaging of these terms was closure, the defining feature of the Palestinian economy during the Oslo period. Israel first imposed closure as a long-term measure in March 1993, six months before the first Oslo agreement was signed. Not once since then has the closure been lifted, although its intensity has varied. Closure has sealed off the Gaza Strip and, to a lesser extent, the West Bank from Israel, from other external markets, and from each other. Its impact on the Palestinian economy, particularly labor and trade, has been devastating.
Closure has three forms: general, total, and internal. General closure refers to the overall restrictions placed on the movement of labor, goods, and the factors of production between the West Bank and Gaza and between these territories and Israel, and it is usually accompanied by prolonged delays and searches at border crossings. Total closure, the complete banning of any movement, typically is imposed in anticipation of or following a Palestinian extremist attack inside Israel. Internal closure, which restricts movement between Palestinian localities within the West Bank itself, was facilitated by the 1995 Oslo II agreement, which turned the West Bank into a series of cantons separated from each other by areas under Israeli control. According to Amnesty International, by December 1999 the Oslo agreements had created 227 separate areas in the West Bank under the full or partial control of the PA. The overwhelming majority of these areas--199 to be exact--are less than 2 km2 in size.  Most important, Israel controlled the territory between these enclaves, effectively turning them into bantustans.
In a dramatic reversal of historical trends, closure almost entirely eliminated the movement of people and goods between the West Bank and Gaza, virtually isolating these territories from each other. Furthermore, by severely restricting Palestinian access to Jerusalem, the closure divided the West Bank's northern and southern regions, whose key road connections pass through Jerusalem. In recent years, less than 4 percent of all Palestinians living in the West Bank and Gaza had permission to enter Jerusalem. Since East Jerusalem had always been the commercial heart of the West Bank, the closure devastated the city's Arab economy as well.
The extreme curtailment of economic activity between the territories--especially Gaza--and Israel was particularly devastating in terms of employment. Unemployment levels (with few compensating options elsewhere) were highest during total closure but fluctuated dramatically depending upon the closure's intensity and other Israeli measures. Trade levels (where imports vastly exceeded exports) and production levels were also hard hit, and domestic production was reoriented to more traditional activities. In trade as in labor, Israeli policy remained determinant. While closure introduced new trading patterns, such as the closing of the Gaza Strip and West Bank markets to each other and the shrinking of the Israeli market as a repository for Palestinian exports, old patterns were preserved, such as the one-way trade structure in Israel's favor and Israel's control of Palestinian access to international markets.
As a result of all these trends, poverty rates among Palestinians began to rise. Some 21 percent of the Palestinian population as a whole (and 25 percent of the children) lived below the poverty line (defined as a household with two adults and four children with a yearly consumption of less than $2.10 per day) in 2000. Most of the poor lived in Gaza, where they constituted nearly a third of the total population.
The Palestinian family response to economic distress was reflected in a number of ways. One was an increase in child labor rates, particularly among children 12 to 16 years of age. In 1999, the Palestinian Central Bureau of Statistics found that 74 percent of working children under 18 years of age were not enrolled in school and that 73 percent worked more than 35 hours per week. Given that children below 18 years make up slightly more than 53 percent of the population, the long-term social implications of an increasingly uneducated population are staggering. 
Another household response to rising economic pressure during the Oslo years was that people spent more of their income on food and less on items such as education and health. Families incurred greater debt, depleting their savings and selling personal possessions such as jewelry and appliances to maintain family consumption levels. The growing impoverishment of Palestinians was visible in the proliferation of beggars (mostly women and children) and child peddlers, some as young as five or six--a hitherto rare phenomenon. In Gaza, women and children often traveled in large groups, begging cash or food from institutions and private homes.
PA Policies and the Distortion of Economic Exchange
Israeli policies were the primary factor in the deterioration of the economic environment during the Oslo period, but the PA also played a damaging role. Despite some achievements in establishing a functional tax and banking system and various successes with infrastructural development, the PA failed to create a more level playing field by offering its people greater economic access and protection against abuse. Instead, the PA itself became abusive, adopting a system of economic management that was protectionist and corrupt. Its lack of accountability, transparency, and recourse--amounting to a form of lawlessness--frightened potential investors and undermined the development of the private sector, which is crucial to long-term development and economic reform.
The PA's heavy-handed presence in the market--most keenly felt through state-dominated monopolies personally controlled by individuals high in the PA bureaucracy working in collaboration with Israeli suppliers--also had a stifling effect on the economy. At one time, at least thirteen (and, according to the U.S. State Department, as many as twenty-five) monopolies over the import of such commodities as flour, sugar, oil, frozen meats, cigarettes, live animals, cement, aggregate, steel, wood, tobacco, and petroleum were operating in the Gaza Strip. According to U.S. State Department figures, the PA earned hundreds of millions of dollars per year from these monopolies. This revenue effectively constitutes a transfer of income from poorer groups to a new political class with considerable economic clout. The PA used these profits to subsidize the bureaucracy and, by all accounts, for personal gain as well.  Although some monopolies were apparently disbanded in 1998-99, the PA continued to grant such rights, awarding long-term monopolies on various utilities during 2000. 
The new Palestinian elite is an Oslo phenomenon. Arafat and his close associates decided who can invest in Palestine, under what terms, and in what sectors. They exercised tight control over foreign investment and credit sources and controlled protected areas of the economy, such as energy and construction, in alliance with specific private sector interests (which were thus appeased) and with external actors, namely former Israeli military or security officials who had previously worked in the Gaza Strip and West Bank.  It is not inconceivable that one of the reasons that the PA never once made an international or political issue of Israel's closure policy (despite many public statements criticizing it) was that it served certain of its interests. Under closure, for example, the wage rates of those Palestinian workers confined to the Gaza Strip and West Bank remained low, enabling the PA to employ people cheaply and maintain its system of patronage and dependence.
It hardly bears mentioning that the combined impact on the Palestinian economy of Israeli and PA policies was deleterious. The injury done not only speaks to the substance of economic exchange but to the rules of the exchange itself. These rules, whether written in Tel Aviv or Gaza, clearly show that the principles guiding the management of economic activity were not designed to encourage productive capacities but to thwart them. There were few viable redistributive mechanisms, and many of those that did exist were ethically indefensible. Transgressors were not punished but rewarded, and they emanated from within the highest levels of government, Israeli or Palestinian. In so perverse an environment, economic activity increasingly was shaped by the demands of the moment rather than by the potentialities of the future.
Throughout the Oslo process, Israel maintained total control of Palestinian life, while the PA colluded in this control by imposing its own repressive regime as the agreed upon price of its survival. Palestinian society came to be characterized, at least in part, by disorderly social structures, including government, the law, and the market. Increasingly, the social condition of order was defined not by neutral but by negative rules devised without sympathy and consent. All this occurred within an eroding economy and growing impoverishment. Palestinians had few defenses against these changes other than a withdrawal into the tribe or religion, or into the self, resulting in what Fawaz Turki has called "a splintered social being." 
THE AL-AQSA INTIFADA: NEW DYNAMICS
We are not going to go quietly. We are not going to let Israel continue to inflict its violence or impose its diktat unopposed or with impunity. If they elect to use lethal force against us, our dead bodies and the gut sympathy and outrage they provoke will help draw the world's attention to our plight, help impress upon Israelis the costs and risks of denying us our right to live as full citizens of an adequately sovereign . . . state. Then perhaps we can win the political solution that we have so far failed to gain through peaceful means. 
This simple but tragic statement describes the logic of the al-Aqsa intifada. But the rage that underlies it, although directed primarily at Israel, is also aimed at the PA because of its abuse of its own population during the Oslo process. The political and economic vacuum created by the peace process, filled during the Oslo years by growing restrictions, widening corruption, and growing bureaucratization, has been filled by violence and uncertainty. The nationalist struggle, which both sides have engaged in for so long, has assumed a new dimension among Palestinians: There is little likelihood that people will return to the 28 September 2000 status quo ante, whatever the hardships imposed on them.
In just the first four months of the intifada, more than one million Palestinians experienced Israeli bombardment of their homes, with 25 people killed and 730 injured in these attacks. More than 3,000 homes, inhabited by 21,000 people--almost half of them children under 14--were damaged in Israeli attacks. Israeli shelling left 4,000 people homeless, and close to 500 homes were razed.  Approximately 23 schools were bombed in the West Bank and Gaza.  According to a March 2001 report issued by the Israeli human rights organization B'Tselem, 88 Palestinian children were killed by Israeli security forces since the uprising began, and 4,000 were injured. 
The physical and demographic separation of the Palestinians from Israel (and of Palestinians from each other) has long been a goal of Israeli governments. Prime Minister Ehud Barak began looking into economic and physical separation as early as October 1999 and, with the outbreak of the intifada, began a crude application of separation measures through the construction of checkpoints, walls, fences, trenches, bridges, canals, and tunnels. There are sixteen Israeli checkpoints around Bethlehem alone, and a wall now separates that city from Jerusalem.  There is also an electrified fence around the Gaza Strip. By mid-January 2001, Israel's defense establishment had moved five major West Bank checkpoints along the Green Line eastward.  Since the al-Aqsa uprising began, literally hundreds of checkpoints--concrete or earthen barricades--have been erected at the entrances of Palestinian villages and towns throughout the West Bank and Gaza. The entire town of Jericho is presently surrounded by six-foot-high sand embankments and trenches several feet deep bulldozed across roads by the Israeli army to enforce the total closure and keep the population of 14,000 confined.  The Gaza Strip has been divided into four disconnected parts by concrete blocks. Israeli tanks cover the West Bank and Gaza in a manner not seen since 1967.
Meanwhile, seven years of the Oslo process had left Palestinian society in a weakened and internally fractured state, a direct result of Israeli and PA policies that simultaneously demobilized and disempowered the population.  With the new intifada, Palestinian national identity, already under assault, is being violated further by the reality of separation and by the geographic boundaries used to impose it. The cantonization of people and their land, a fundamental objective of Oslo, has severed the collective into physically and demographically isolated and dysfunctional parts.  This dysfunction, which has become more acute with the al-Aqsa intifada, is marked by an accelerated disintegration of the economy, political fragmentation, and the internalization of violence.
Economic Demise and a Rapid Return to Subsistence
The most visible difficulty in Palestinian society is economic, and it results directly from closure and blockade. In the first four months of the uprising, between 1 October 2000 and 31 January 2001, the Israeli government imposed ninety-three days of total closure, with all borders between Israel and the occupied territories sealed. In addition, internal closure and internal movement restrictions were in effect continuously in the West Bank and for 89 percent of the time in the Gaza Strip. International border crossings to Jordan from the West Bank and to Egypt from the Gaza Strip were closed 29 percent and 50 percent of the time, respectively. 
Direct economic losses resulting from closure have been similarly severe. Infrastructure work has stopped altogether. The Gaza port is paralyzed, as are the sewage system in Nablus and the electricity network in Jinin. Many industries, particularly in the textile and food sectors, have completely closed due to shortages of raw materials and the inability to reach their markets. Approximately half of Palestine's industries have come to a standstill.  According to one U.S. State Department official, the agricultural sector in Gaza is on the verge of collapse due to the restrictions of closure and to the massive destruction, mostly in Gaza, of thousands of acres of agricultural land and the razing of tens of thousands of fruit-bearing trees. All vegetation--including olive and citrus trees, banana plants, mango groves, agricultural sheds, vegetable greenhouses, and palm trees--along the roadside from Gaza City to Khan Yunis has been destroyed. 
In the first four months of the uprising, the Palestinian economy, which produces around $4 billion annually, lost more than $1.15 billion--$907.3 million in gross domestic product (GDP) losses and $243.4 million arising from the lost income from work in Israel.  These losses are estimated at 50 percent of GDP and 75 percent of wage income earned by Palestinian workers in Israel, or $11 million per working day.  To this must be added hundreds of millions of dollars in damage to public buildings, private property, infrastructure, and agricultural land as well as the costs of caring for more than 11,000 injured and 1,500 permanently disabled people.  According to the PA Ministry of Finance, total losses to the economy through 20 March 2001 equaled about $3.9 billion. 
By April 2001, the average unemployment rate more than tripled from 11 percent (or 71,000 people) in the first nine months of 2000 to 40 percent (or more than 250,000 people); in Gaza the rate has gone as high as 60 percent.  Furthermore, given the high dependency ratio among Palestinians, unemployment really affects 900,000 people, or 29 percent of the population.  Per capita income has declined by 47 percent, from a projected average of $2,000 (in 2000) to $1,060, about 6.2 percent of the level among Israelis. 
In January 2001, the UNRWA in Gaza reported that there were 127,000 families (more than 700,000 people), or 85 percent of the local refugee population, in need of food assistance.  According to the World Bank, poverty rates rose by more than 50 percent between September 2000 and January 2001, with an estimated one-third of Palestinians, around one million people, living below the poverty level. Otherwise stated, in the first four months of the uprising, the number of people living in poverty increased from 650,000 to one million, or from 21 percent to 32 percent of the population.  By April 2001, just three months later, the number of Palestinians living below the poverty line doubled from 1 million to 2.1 million.  In the camp homes I visited in the southern Gaza Strip in January, women reported that they did not have enough food to feed their children: A typical meal consisted of bread, zatar, tea, and sugar.
A report commissioned by the U.S. Agency for International Development in December 2000 indicated that "if the current situation remains, there will be indications of humanitarian crisis--measured in high malnutrition rates, increased morbidity and mortality--among vulnerable groups within three months."  Recent decisions by the Israeli government to withhold fuel from the Gaza Strip and water from Hebron make clear that the Palestinian economy has little chance of producing, and that mere survival is now the goal.
An Emerging Political Vacuum
In striking contrast to its almost hegemonic presence in the West Bank and Gaza Strip throughout the Oslo period, the PA has virtually become a nonpresence, having failed to articulate any leadership, political, or organizational role for itself since the beginning of the al-Aqsa intifada.  During the current crisis, the PA for all practical purposes has ceased to provide needed services to its people. The Palestinian legislature and judiciary  also have ceased to function, as have parts of the public sector, a potentially destabilizing dynamic for both Palestinians and Israelis. The PA itself has been cut into two completely isolated parts: one in Gaza and the other in Ramallah, which Arafat was unable to enter until he met U.S. Secretary of State Colin Powell there on 25 February 2001.
The dwindling of the PA is linked to the near loss of the security role to which it was assigned by Israel (and the United States).  The weakening of its security function--i.e., security coordination with Israel--has robbed the PA of its primary purpose and operating framework. The PA's legitimacy also derived from the peace process; the fact that it has now ended has marginalized it even more.  Another reason for the PA's decline is financial. Israeli closure policies and other punitive sanctions, added to the PA's habitual mismanagement and corruption, have brought the PA to the verge of collapse. For example, revenues for January 2001 were about $45 million, $30 million of which the Israeli government refused to transfer. The PA therefore was left with $15 million to pay a $55 million wage bill for 100,000 civil servants.  However, security personnel continue to get paid on time and in full. 
The political vacuum created by the institutional breakdown of the PA has been filled by a variety of armed militias, most headed by Fatah and having closer links to the PLO rather than the PA (leading to speculation that the PLO, marginalized by the Oslo process in favor of the PA, is now making a return). They include the now famous Fatah tanzim, the shabiba, members of the secular opposition, Islamist factions (notably Islamic Jihad), youth groups, students, and released prisoners. The "strategy" of the tanzim has been to militarily confront the Israeli army, challenge it, and draw it into using lethal force.  Their political goal is to get Israel to withdraw to the June 1967 borders, ending the occupation by making it too costly for Israel to remain. Armed Palestinian actions are also directed at Israeli settlements with the aim of isolating settlements and forcing the settlers to leave the occupied territories.
These various armed groups, which operate under new names, such as the al-Aqsa Martyr's Brigade (kata'ib shuhada' al-Aqsa) and the Forces of Badr (quwwat badr), appear to be autonomous forces within the Palestinian national movement and not part of the PA.  They articulate their policies independently and also through the National and Islamic Forces (NIF), a coalition of fourteen political factions attempting to provide the operational and organizational structure for the uprising and to plan and organize specific activities, such as the consumer boycott of Israeli products. Despite the fact that the PA remains officially responsible for national policy, the NIF increasingly is assuming a policy role.  Not surprisingly, the NIF agenda--national liberation--differs markedly from that of the PA, which is to resurrect the Oslo process. For the former, the intifada is a war; for the latter, it is a form of diplomatic leverage. Confrontation between the two views seems inevitable. 
It is unclear to what extent there is a unified vision guiding Palestinian actions or even whether these actions are coordinated. At best, there appear to be tactics but no strategy or long-range thinking. What seems clear, however, is that political groups are mobilized behind the negative agenda of destroying the Oslo process and its damaging manifestations rather than behind the positive agenda of reconstruction and rehabilitation. In this way, the nature of Palestinian resistance and political praxis is being defined by armed factions rather than by civic institutions. Hence, Fatah aims to restore its past legitimacy as a national liberation movement through the militarization of the intifada and not through the incorporation and mobilization of Palestinian civil society, which is increasingly marginalized. 
The absence of political and institutional authority, coupled with heightened political fragmentation and the militancy of the uprising, has inevitably led to internal lawlessness and violence. Some armed militias have degenerated into gangs and have taken the law into their own hands by threatening government officials and others accused of corruption with punishment or even death. Another manifestation of internal violence is the execution by the PA of two alleged collaborators in summary trials without due process, which some analysts believe is an attempt by the PA to rehabilitate its image with the population. 
In the present circumstances, it is difficult to envision a process of reconstruction or reassertion, be it political, social, or economic. There is no governing institution in Palestine that can protect its citizens or engage in meaningful public service or leadership in any form. There is no due process or any real system of accountability, appeal, or justice. There is no economic growth or development, nor any possibility of any. There is, in effect, an inexorable return to subsistence, both economic and political. The final and immediate arbiter of power and control remains Israel, whose behavior has grown exceedingly brutal since the fall of 2000.
Yet, no situation is devoid of hope. Civil society institutions, despite their loss of centrality, continue to resist the breakdown of key social connections and thereby maintain a moral center. They include a range of grass-roots organizations, religious and secular, working to rebuild local communities through the provision of educational, health, and other social services. There are also human rights organizations that continue to document and protest violations by the Israeli government and the PA under constant danger to themselves.
The Palestinian-Israeli conflict has always been a struggle between two peoples mapping their unique histories onto a set of territorial arrangements.  In this struggle, the acquisition and control of land has defined existence for the Jewish people in Israel but has not normalized it.  This normalization only can come with the end of occupation. Israelis, like Palestinians, must ask themselves what kind of society they want. The critical vision and self-examination necessary to answer this question are receding in both societies, and their loss carries with it a prohibitive cost, higher now than perhaps ever before.
Sara Roy is a research associate at the Center for Middle Eastern Studies at Harvard University. This article emanates from a project supported by a grant from the Research and Writing Initiative of the Program on Global Security and Sustainability of the John D. and Catherine T. MacArthur Foundation.