U.N. warns on Gaza economy amid blockade

( AP ) - The Gaza Strip will soon become entirely dependent on foreign aid and face "disastrous consequences" if the Hamas-run territory remains sealed off, the U.N. said Thursday.

A Palestinian business group, meanwhile, said at least 120,000 Gazans could lose their jobs.

Israel and Egypt closed their crossings with Gaza to all but humanitarian aid after the Islamic militant group Hamas violently seized power in the coastal strip in June, exacerbating poverty among the territory's 1.4 million residents.

The blockade has put Gaza's fragile economy in danger and the window of opportunity for addressing the crisis "is small and fast closing," said Filippo Grandi, the deputy head of U.N. Relief and Works Agency, the international body responsible for Palestinian refugees.

" Gaza risks becoming a virtually 100 percent aid-dependent, closed-down and isolated community within a matter of months or weeks, if the present regime of closure continues," Grandi said at a news conference.

He appealed to "the Palestinian Authority, Israel and all other parties" to open the crossings, saying failure to do so would lead to "disastrous consequences, an atmosphere of hopelessness and despair in which extremism likely to take hold."

Even before Hamas' takeover, 1.1 million Gazans received foreign food assistance, a figure that rose sharply as a result of Israeli trade restrictions and an international aid embargo imposed after Hamas won 2006 elections.

Separately, the Association of Palestinian Businessmen reported that cumulative losses to industry in Gaza had reached $23 million since the Hamas takeover. If the closure continues, at least 120,000 could lose their jobs, the association said.

Two weeks ago, the Palestinian Federation of Industries reported that the closure of Gaza had forced the dismissal of about 70,000 of 120,000 private sector workers, driving unemployment above 40 percent.

The Hamas takeover has left Gaza isolated, but has also had the effect of jump-starting peace moves. Israel and the international community are scrambling to shore up President Mahmoud Abbas of the rival Fatah movement, who formed a moderate government that rules the West Bank.

Israeli Prime Minister Ehud Olmert is now holding regular talks with Abbas, and Israel scaled back its military activities in the West Bank. But clashes continue in Gaza, where troops regularly battle Palestinian militants firing rockets into Israel.

" Gaza creates a security threat for us, while the other part controlled by the new Palestinian government can create an opportunity," Israeli Foreign Minister Tzipi Livni said Thursday during a visit to Sderot, a southern Israeli town regularly targeted by Palestinian rocket teams.

On Thursday, soldiers shot an unarmed 22-year-old Palestinian man along the Gaza-Israel border fence, Israeli and Palestinian officials said.

The army said troops spotted a man crawling near the fence past midnight and suspected he was planting a bomb. Soldiers opened fire after he ignored warning shots, the army said.

In continued Palestinian scuffling, Hamas arrested a doctor loyal to Fatah who reported that supplies at Gaza's largest hospital have been scarce since the group's takeover.

The Gaza Health Ministry, controlled by Hamas, accused Dr. Jomma Saka of lying, then fired him on grounds of corruption. He was accused, among other things, of stealing furniture from the hospital. Hamas denied the arrest was politically motivated.

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