Background: The Israel-PLO Declaration of Principles on Interim Self-Government Arrangements (the DOP) signed in Washington on 13 September 1993 provides for a transitional period not exceeding five years of Palestinian interim self-government in the Gaza Strip and the West Bank. Under the DOP Israel agreed to transfer certain powers and responsibilities to the Palestinian Authority which includes a Palestinian Legislative Council elected in January 1996 as part of interim self-governing arrangements in the West Bank and Gaza Strip. A transfer of powers and responsibilities for the Gaza Strip and Jericho took place pursuant to the Israel-PLO 4 May 1994 Cairo Agreement on the Gaza Strip and the Jericho Area and in additional areas of the West Bank pursuant to the Israel-PLO 28 September 1995 Interim Agreement the Israel-PLO 15 January 1997 Protocol Concerning Redeployment in Hebron the Israel-PLO 23 October 1998 Wye River Memorandum and the 4 September 1999 Sharm el-Sheikh Agreement. The DOP provides that Israel will retain responsibility during the transitional period for external security and for internal security and public order of settlements and Israeli citizens. Permanent status is to be determined through direct negotiations which resumed in September 1999 after a three-year hiatus.
Geography Note: landlocked; highlands are main recharge area for Israel's coastal aquifers; there are 231 Israeli settlements and civilian land use sites in the West Bank and 29 in East Jerusalem (August 1999 est.)
Economy overview: Economic conditions in the West Bank - where economic activity is governed by the Paris Economic Protocol of April 1994 between Israel and the Palestinian Authority - have deteriorated since the early 1990s. Real per capita GDP for the West Bank and Gaza Strip (WBGS) declined 36.1% between 1992 and 1996 owing to the combined effect of falling aggregate incomes and robust population growth. The downturn in economic activity was largely the result of Israeli closure policies - the imposition of generalized border closures in response to security incidents in Israel - which disrupted previously established labor and commodity market relationships between Israel and the WBGS. The most serious negative social effect of this downturn has been the emergence of chronic unemployment; average unemployment rates in the WBGS during the 1980s were generally under 5%; by the mid-1990s this level had risen to over 20%. Since 1997 Israel's use of comprehensive closures has decreased and in 1998 Israel implemented new policies to reduce the impact of closures and other security procedures on the movement of Palestinian goods and labor. In October 1999 Israel permitted the opening of a safe passage between the West Bank and the Gaza Strip in accordance with the 1995 Interim Agreement. These changes in the conduct of economic activity have fueled a moderate economic recovery in 1998-99.
Industries: generally small family businesses that produce cement textiles soap olive-wood carvings and mother-of-pearl souvenirs; the Israelis have established some small-scale modern industries in the settlements and industrial centers
Electricity production: NA kWh; note - most electricity imported from Israel; East Jerusalem Electric Company buys and distributes electricity to Palestinians in East Jerusalem and its concession in the West Bank; the Israel Electric Company directly supplies electricity to most Jewish residents and military facilities; at the same time some Palestinian municipalities such as Nabulus and Janin generate their own electricity from small power plants
Disputes international: West Bank and Gaza Strip are Israeli-occupied with current status subject to the Israeli-Palestinian Interim Agreement - permanent status to be determined through further negotiation