Gaza Strip

The war between Israel and the Arab states in June 1967 ended with Israel in control of the West Bank and the Gaza Strip, the Sinai, and the Golan Heights. As stated in the 1978 Camp David accords and reaffirmed by President Bush's post - Gulf crisis peace initiative, the final status of the West Bank and the Gaza Strip, their relationship with their neighbors, and a peace treaty be-tween Israel and Jordan are to be negotiated among the concerned parties.

Camp David further specifies that these negotiations will resolve the respective boundaries. Pending the completion of this process, it is US policy that the final status of the West Bank and the Gaza Strip has yet to be determined. In the US view, the term West Bank describes all of the area west of the Jordan River under Jordanian administration before the 1967 Arab-Israeli war.

With respect to negotiations envisaged in the framework agreement, however, it is US policy that a distinction must be made between Jerusalem and the rest of the West Bank because of the city's special status and circumstances. Therefore, a negotiated solution for the final status of Jerusalem could be different in character from that of the rest of the West Bank.

The Gaza Strip is currently governed by Israeli military authorities and Israeli civil administration; it is US policy that the final status of the Gaza Strip will be determined by negotiations among the concerned parties; these negotiations will determine how this area is to be governed. There are 18 Jewish settlements in the Gaza Strip.

In 1990 roughly 40% of Gaza Strip workers were employed across the border by Israeli industrial, construction, and agricultural enterprises, with worker remittances accounting for about one-third of GNP. The construction, agricultural, and industrial sectors account for about 15%, 12%, and 8% of GNP, respectively.

Gaza depends upon Israel for some 90% of its external trade. Unrest in the territory in 1988-92 (intifadah) has raised unemployment and substantially lowered the standard of living of Gazans. The Persian Gulf crisis and its aftershocks also have dealt severe blows to Gaza since August 1990.

Worker remittances from the Gulf states have plunged, unemployment has increased, and exports have fallen dramatically. The area's economic outlook remains bleak.