The Bush administration contends this bill could tie its hands in that effort. The administration has stopped direct aid to the Hamas-led government, but the bill would put into law more sweeping bans. A Palestinian representative denounced the bill as harmful to peace.

The House bill would cut off direct and indirect U.S. assistance to the Palestinian Authority, other than aid to meet "the basic human health needs" of the Palestinian people and for measures Congress approves on a case-by-case basis. It would limit aid through nongovernmental organizations and restrict diplomatic contacts with Hamas representatives.

The bill calls for the Palestinian Authority to be designated a "terrorist sanctuary." It would ban visas for entry into the United States of any member of the PA or any of its components.

It also recommends withholding U.S. contributions to the United Nations proportional to the amount the world body provides the authority.

Facing insurmountable momentum in the House for the bill, congressional aides said the administration will aim to stall or weaken the companion measure in the Senate. The Senate version already gives the administration more leeway than the House-passed bill.

"We hope we'll be able to move" the bill, said Sen. Mitch McConnell of Kentucky, second-ranked in the Senate Republican leadership. Discussions were being held with the White House on ways it could waive bans in the bill, which has about 88-cosponors from the 100-member Senate, he said.
Under the House bill, aid would be restored if Hamas recognizes Israel's right to exist, renounces terrorism and disarms.

Nabil Abu Rdainah, an adviser to Palestinian President Mahmoud Abbas, told Reuters in Jerusalem the House action "harms the peace process and undermines international efforts ... to lift the siege imposed on the Palestinian people."

Hamas took power in March after winning January parliamentary elections. Tensions have surged between Fatah, the long-dominant Palestinian faction, and Hamas, and skirmishes have given rise to fears of mounting violence among rival Palestinian factions.

Rep. Earl Blumenauer, an Oregon Democrat who led a small charge against the bill in nearly three hours of debate on May 22, said it was too punitive on Palestinians and "onerous and burdensome" on the administration's diplomatic efforts.

"I am afraid that this legislation may well backfire by actually strengthening the hands of extremists," he said.
But Rep. Tom Lantos of California, top International Relations Committee Democrat and the bill's co-sponsor, said instead of punishing Palestinians, the bill was "carefully crafted and aimed at Hamas."

"The United States must make it unambiguously clear that we will not support a terrorist regime," said Rep. Ileana Ros-Lehtinen, a Florida Republican.

Jimmy Carter has been blunt: Despite the fact of a Palestinian election result that was not to their liking, the former president says, "it is unconscionable for Israel, the United States and others under their influence to continue punishing the innocent and already persecuted people of Palestine."

Since the political wing of the militant group Hamas swept parliamentary elections in Palestine, the U.S. and Israel have been trying to use economic pressure to force a change of course. Disregarding the democracy that President Bush says he wants to promote in the Middle East, the U.S. has sanctioned policies that have fostered chaos on the Gaza Strip and the West Bank and created increasingly harsh conditions for people who have known more than their share of suffering.

"Innocent Palestinian people are being treated like animals, with the presumption that they are guilty of some crime," argues Carter, a Nobel Peace Prize winner whose involvement in the Middle East peace process has extended across three decades. "Because they voted for candidates who are members of Hamas, the United States government has become the driving force behind an apparently effective scheme of depriving the general public of income, access to the outside world and the necessities of life."

Instead of checking and balancing the president's misguided approach to an election result that displeased him, Congress has added fuel to the fire.


By a lopsided vote of 361 to 37, the House voted Tuesday for the so-called "Palestinian Anti-Terrorism Act," a measure so draconian that even the Bush administration has opposed it.

The legislation, which still must be reconciled with a similar measure passed by the Senate, would cut off all assistance to the Hamas-led Palestinian Authority, and place conditions on humanitarian assistance delivered directly to the Palestinians by non-government organizations. Presidential spokesman Tony Snow, in restating the White House's opposition to the measure says that it "unnecessarily constrains" the flow of essential assistance - food, fresh water, medicine - in a manner that does, indeed, "tie the president's hand" when it comes to providing humanitarian aid.

It also has the potential to encourage, rather than restrain, violence.

Representative Earl Blumenauer, an Oregon Democrat who was one of the few members of the House to argue against the legislation, correctly explained that the approach endorsed by most of his colleagues will strengthen the hand of Palestinian extremists.

"It does little to prioritize on the basis of our strategic interests, and provides no prospect for Palestinian reform coming through the process of negotiations," Blumenauer said of the legislation. "In so doing, it weakens the hands of those who advocate for peace negotiations, and supports those extremists who believe in violence."

Debra DeLee, President and CEO of Americans for Peace Now, which works closely with Israeli groups seeking a peaceful settlement of tensions with the Palestinians, calls the bill "an exercise in overreaching that will undercut American national security needs, Israeli interests, and hope for the Palestinian people, if it's ever signed into law."

"We urged the House to craft legislation that was focused and flexible enough to allow the U.S. to respond to Hamas' election victory in a firm, yet responsible, manner," explained a frustrated DeLee. "But by failing to provide the president with a real national security waiver, by failing to include a sunset clause for draconian performance requirements that will stay on the books regardless of who is running the Palestinian Authority, and by failing to distinguish between Hamas and Palestinians who support a two-state solution, the supporters of this bill have missed that opportunity for now."

Despite its dramatic flaws, the bill drew bipartisan support, with House Speaker Dennis Hastert, R-Illinois, and Majority Leader John Boehner, R-Ohio, and Minority Leader Nancy Pelosi, D-California, lining up their respective caucuses behind it.

Of the 37 "no" votes, 31 came from Democrats, including senior members such as Michigan's John Conyers and John Dingell, Californians George Miller and Pete Stark and Wisconsin's David Obey. Ohio's Dennis Kucinich, a contender for the 2004 Democratic presidential nomination, also opposed the measure, as did California's Barbara Lee, a co-chair of the Congressional Progressive Caucus

The six Republican "no" votes came from Maryland's Wayne Gilchrest, North Carolina's Walter Jones, Arizona's Jim Kolbe, Illinois' Ray LaHood and Texans Ron Paul and Mac Thornberry.

As is frequently the case on votes involving Israel and Palestine, dozens of members did not participate. Nine House members, all of them Democrats, voted "present" Tuesday. Twenty-five members, eleven of them Democrats, fourteen of them Republicans, registered no vote.

Americans for Peace Now's DeLee says that, as the House and Senate seek to reconcile differing bills, her group will continue to work to alter the legislation so that it will not encourage extremism or worsen a humanitarian crisis. But there is no question that the task has been made more difficult by the overwhelming House vote in favor of this misguided measure.

Other, more even-handed Zionist groups, including Americans for Peace Now (APN) and the Israel Policy Forum (IPF), also opposed the measure, arguing that its conditions for restoring aid to the PA were likely to increase the chances of a humanitarian disaster in both Gaza and the West Bank and strengthen hardliners in the PA's Hamas-led government.

"The AIPAC leadership has its own agenda," said Lewis Roth, an APN spokesman, noting that the bill's conditions for restoring aid went beyond those set by Israel itself.

Olmert, whose Kadema party heads a coalition that includes the more-dovish Labour Party and two more right-wing parties, arrived in Washington in hopes of securing the strongest possible White House endorsement of his campaign pledge to dismantle more isolated West Bank settlements as part of a "realignment" designed to consolidate existing settlement blocs close to the "Green Line" and establish Israel's "permanent" borders over the next several years.

While Olmert has said -- as he did in an exceptionally well-attended and enthusiastically received speech to a joint session of Congress here Wednesday -- he prefers that such a process be carried out as a result of bilateral negotiations with the PA, particularly its president, Mahmoud Abbas, he has also insisted that Israel would implement it unilaterally, if necessary, just as former Prime Minister Ariel Sharon carried out Israel's "disengagement" from Gaza last summer.

"Should we realise that the bilateral track with the Palestinians is of no consequence, should the Palestinians ignore our outstretched hand for peace, Israel will seek other alternatives to promote our future and the prospects of hope in the Middle East," he told Congress. "At that juncture, the time for realignment will occur."

But Bush, whose weak political position and preoccupation with Iraq and Iran's nuclear programme have made him uncharacteristically sensitive to the concerns of European and Arab allies, has been leery of explicitly endorsing any further unilateral measures. Instead, he has called for the revival of the three-year-old Road Map, which requires bilateral negotiations within a larger multilateral framework.

The problem, however, is that both Olmert and Bush have ruled out any negotiations with or aid to a Hamas-led PA until the Islamist party, which unexpectedly swept elections in January, meets three conditions: recognition of Israel, renunciation of terrorism, and endorsement of all previous agreements negotiated between the Palestine Liberation Organisation (PLO)/PA and Israel.

In the face of Hamas' refusal to date to do so, the administration has been pushing Olmert to start negotiations with Abbas. Despite Olmert's reported belief that the Palestinian president is politically far too weak to meaningfully commit the PA, his foreign minister met with Abbas for the first time last week, and he promised Bush to follow up with a summit soon.

"We hope he will have the power to be able to meet the requirements necessary for negotiations between us and the Palestinians," he said at the White House Tuesday.

In exchange, it appears that Olmert received a qualified endorsement for proceeding with an eventual unilateral "realignment" if the Palestinians fail to offer an adequate response. As noted by the New York Times, U.S. officials who last week labeled the plan merely "interesting" were more positive by the time the prime minister met Bush, who called it "bold" and "creative" during a joint press conference.

"Olmert got enough of a green light to go ahead with the planning and campaigning for the realignment when he returns to Israel," APN's Lewis Roth told IPS.

It was in this context, however, that the House took up the AIPAC-backed Palestinian Anti-Terrorism Act whose provisions, according to its critics, are not only more likely to worsen the deteriorating humanitarian situation in the occupied territories, but also risks strengthening hardliners within Hamas.

The bill would cut off all U.S. aid to the PA and require all U.S. humanitarian aid to be channeled through non-governmental organisations (NGOs), including U.N. agencies which would be subject to a series of audits to ensure that Hamas was not benefiting directly or indirectly from their assistance.

The measure would also require the administration to shut down all Palestinian diplomatic offices in the U.S., deny visas to PA officials, and bar all diplomatic exchanges between U.S. and Palestinian officials. It also declares Palestinian territory to be a "terrorist sanctuary", which would make it far more difficult for U.S. companies to do business there, and instructs the U.S. representative to the World Bank to oppose humanitarian aid projects for Palestinians.

To restore aid, the president would have to certify that Hamas has not only met the three official U.S. conditions, but also has halted an anti-Israeli incitement and guaranteed financial transparency in its institutions.

"On this issue, Congress has shown its capacity for being totally irresponsible," the IPF's Stephen Cohen told Congressional Quarterly. "They're always passing bills that try to punish someone. They never think of anything they can do that offers anybody an incentive."

Ironically, the vote came on the same day that the head of the Israeli military. Lt. Gen. Dan Halutz, fuelling a growing debate about the wisdom of Israel's efforts to isolate Hamas, told the Knesset that economic sanctions against the PA was unlikely to reduce popular support for the Islamists, let alone result in their ouster from power.

Even while the House approved the bill, however, hard-line neo-conservatives and leaders of the Christian Right here launched a strong attack on Olmert's "realignment" plans under the general theme that, in the words of one full-page Washington Times ad paid for by far-right Americans for a Safe Israel (ASI), "Friends don't let friends commit suicide."

Writing in the Wall Street Journal, former Central Intelligence Agency (CIA) director James Woolsey warned that Israel's withdrawal from most of the West Bank would result in a "West Bank terrorist state", part of an "Iranian-Syrian-Hezbollah-Hamas axis (that) is quite explicit about a genocidal objective" against the Jews. Similar themes were sounded in Washington Times op-eds by Centre for Security Policy president Frank Gaffney and the Heritage Foundation's Ariel Cohen.

ASI's ad was signed by half a dozen Christian Right groups -- a core constituency of Bush's. It warned that realignment would "reverse the victorious miracles of (the) 1967 (Arab-Israeli War)" and violate "God's promise to the Jewish people," asserting that "there is a moral duty for the United States to restrain the State of Israel from destroying itself".

The next day, the family set up the traditional mourning tent within sight of the old man's flattened house. A stream of friends and neighbours arrived to pay their condolences and take coffee. "Then the shells started falling again," says another nephew, Adel al-Sawarka. "We heard screaming and shouting and it was Hassan al-Shafei. The shrapnel hit him in the back and almost cut him in half. There were so many shells, we had to crawl on the ground to escape."

Hassan al-Shafei, a 55-year-old fruit and vegetable farmer, died in hospital. His cousin, Ahmed al-Shafei, carries to the mourning tent five large pieces of shrapnel he picked up in the field. Each is more than six inches long, heavy and jagged. "Imagine this thing, so hot and fast. Just one piece would tear a person's body. It's horrible," he says.

After that, both families set up mourning tents on the other side of town where there were fewer shells, although still enough for the neighbouring American School to close its doors and move to Gaza City in January.

Since the beginning of last month, Israel has fired more than 5,100 shells into the Gaza strip from artillery just the other side of the border and from ships off the coast. The military says the bombardment is aimed at deterring Palestinian rocket attacks into Israel from open fields, but the artillery fire has killed six Palestinian civilians, including two children, eight-year-old Hadeel Ghaen and 15-year-old Mamdouh Obaid, and wounded 60 others, including 21 children.

The Israeli army changed its own rules to allow it to drop shells within 100 metres of built-up areas. On the afternoon that the Sawarka family was mourning the loss of Mousa, more than 300 shells fell in and around Beit Lahia, some so close that the explosions rocked the fragile homes.

"We are Bedouin and we live in homes with zinc roofs and it doesn't protect us," says Fares al-Sawarka. "The Israelis are dropping shells closer and closer. They can see that for 10 years we have been doing the same things, moving the camels at particular times. They know our names even. They know who they kill. Before, they targeted the fighters. Now they are targeting all of us. The Bedouin have no relationship with the fighters. This is collective punishment."

The two men are among about 110 Palestinians who have been killed by Israel since the beginning of the year, about half of them civilians. At the weekend, an Israeli missile strike on a car carrying an Islamic Jihad commander also killed three generations of a family driving by. The youngest victim, Muhannad Mohammed Aamen, was four years old.

This is not how Palestinians imagined life would be eight months after they danced on the ruins of Jewish settlements as Israel withdrew from the occupied Gaza strip. The scenes of soldiers hauling settlers, who declared that they were being forced to abandon land given to them by God, weeping from their homes, were greeted as a liberation by Palestinians 38 years after Israeli troops marched in. The bulldozing of Israel's sprawling colonies in the Gaza strip, and the dismantling of its fortified military posts around Palestinian towns and refugee camps, offered the prospect of a new beginning with freedom of travel, economic prosperity and, simply, peace.

Gazans have got some of that. The southern Gaza town of Rafah, the most bloodied and destroyed in the strip, is finally free from the daily terror of Israeli bullets and the misery of house demolitions by army bulldozers. It was regularly cut off from most of the rest of the territory by army checkpoints that separated people from their jobs and schools, and even forced some to move home.

Israeli settlements carved up the main highway running the length of the territory, and the army imposed the notorious Abu Houli checkpoint on the Palestinians. Abu Houli is named after the Palestinian whose land was used to build a bridge carrying Jewish settlers to their homes, and it is where Arabs waited for hours, even days, to cross. It came to symbolise for many Palestinians the pervasive oppression of occupation, and now all that remains are the concrete foundations.

Today Gazans are more or less free to move around inside the strip and to travel to Egypt and beyond. The settlements themselves are now mostly rubble, although the Jewish religious school in Gush Katif, constructed in the shape of a Star of David, is now used as a classroom for the Al-Aqsa university, and an Egyptian company is clearing Netzarim settlement to build a children's fairground in its place, to be called Lunar Park.

But Gazans are grappling with new problems imposed from without and within. Hamas's victory in the parliamentary election in January brought international sanctions - including the freezing of nearly $1bn a year in aid from the US and EU - and a power struggle that has spilled on to the streets as the victorious Islamists try to assert their control over the Palestinian Authority in the face of resistance from an embittered and defeated Fatah.

Hamas installed a prime minister, Ismail Haniyeh, and a cabinet, but it is still far from exerting authority over the Gaza strip, where the core of its support lies, let alone the West Bank. Gun fights between Hamas and Fatah-controlled security forces are ever more frequent, and have claimed eight lives since the beginning of the month, as the rival groups attempt to assert control of the streets. On Monday, a Jordanian diplomat was shot dead driving past the Palestinian parliament as Hamas and Fatah militiamen unleashed grenades and bullets at each other.

Hamas has attempted to impose its authority by deploying a 3,000-strong security force on the streets to guard government ministries, banks and public buildings, but that has only exacerbated the tensions. The Palestinian president, Mahmoud Abbas, has responded by declaring that his forces are in control of Gaza's borders and that only his policemen are permitted to carry weapons on the street.

It has been a maxim of Palestinian politics that no one would ever want civil war, as that would play into the hands of the Israelis. But many ordinary residents of Gaza are wondering if that is still true, especially since two assassination attempts took place at the weekend. One of them nearly claimed the life of the Palestinian intelligence chief in Gaza, a Fatah man, after a bomb exploded as he got into a lift in his own headquarters. It is still not clear who was responsible for the attack, but had it succeeded, many would have blamed Hamas.

But as dramatic as the scenes of fighting are, the bulk of Gazans will tell you their real problems are economic. When Israel pulled out in September, it said it wanted a free and prosperous Gaza. What the Palestinians have got instead are piles of rotting fruit once destined for European tables amid an Israeli blockade that has quashed attempts to build a flourishing agricultural trade and bankrupted businesses. With it has come a freezing of about $1bn in annual aid by the EU and US until Hamas meets demands for it to recognise Israel and renounce violence.

The withdrawal of aid has left the Palestinian Authority unable to pay its 160,000 workers, hospitals running dangerously short of medicines and the economy plunging into recession. The UN calculates that one PA salary paid to nurses, teachers and policemen supports seven people - more than one million in total, or one in four residents of the occupied territories.

The Palestinians had hoped to begin standing on their own feet. After the Israeli withdrawal, they took over the settlers' greenhouses with the promise of a flourishing export trade in fruit and vegetables that would create thousands of jobs and bring in tens of millions of dollars in revenues. They planted tomatoes and peppers, melons and strawberries, for harvest in January. This week, the greenhouses were finally closed, driven out of business by an Israeli economic blockade tightened after Hamas won the election.

The Israeli prime minister's closest adviser, Dov Weisglass, revealed that what Israel has in mind for Gaza is not prosperity but keeping it teetering on life support. "We need to make the Palestinians lose weight, but not to starve to death," he said.

At the mourning tent in Beit Lahia, I meet Ahmed al-Shafei, chairman of the Gaza Cooperative Association for Producing and Marketing Vegetables. "Two thousand families in this town depend on the strawberries," he says. "We used to get 12 shekels a kilo exporting. Now we get one or two shekels in the market here if we get anything at all. It's cost us $1.5m in lost strawberry sales."

Salim Abu Safiya is in charge of Gaza's borders for the Palestinian Authority working from an office near the main cargo crossing at Karni, with shells dropping periodically not far away. "If you add up all the hours that Karni has been open since the beginning of the year, it amounts to just three weeks," he says. "This is three or four hours a day and sometimes it's closed for weeks. Karni has the capacity to handle about 700 lorries a day. Now, if it is open, it handles only about 50."

On the day we speak, Karni is open for a little more than three hours for imports. Exports haven't been allowed in months. "Israel sends us what they want to send us, not what we need," he says. "They are sending fruit, construction material, frozen food, so Israel can save its face and not let us starve." What they need instead is medicine, tampons, washing powder, milk and baby formula.

The impact on some Palestinian industries has been devastating. Textile factories have thrown 75,000 people out of work because they can no longer get their garments out of Gaza. Safiya estimates that there are 700 lorry loads of furniture waiting to be sent to Israel. "Since the beginning of the second intifada, Israel has used the borders as a tool to pressure the Palestinians," he says. "The rest of the economy was destroyed as a result of the closure of the borders. A third of Palestinian industrialists have left for abroad. Twenty-two of the big Palestinian factories have sought a permit to move to Egypt or Sudan. Nineteen garment factories have closed in the past two months."

The unemployment rate in Gaza is 44%, although it rises at times when Israel bars Palestinian workers from entering Israel. Per capita income has dropped 40% in three years. About 70% of the population is defined as living in poverty.

The Israeli government has justified the persistent closure of Karni with what it said was intelligence about impending attacks. Others are sceptical. James Wolfensohn, the US-appointed special envoy to Israel and the occupied territories, who was critical of both sides before he resigned last month, expressed particular frustration at what he characterised as Israeli "foot-dragging" over the border crossings. He has accused the Israeli government of being "loath to relinquish control, almost acting as though there has been no withdrawal" from Gaza. Late last year, Wolfensohn threatened to quit unless Israel agreed to ease the blockade. The US secretary of state, Condoleezza Rice, intervened and won a commitment from Israel to open Karni 24 hours a day by the end of 2005 and to permit regular convoys of buses and lorries to move people and goods between Gaza and the West Bank. Israel also promised to discuss reopening Gaza's airport, closed at the beginning of the intifada when army bulldozers tore up the runway, and the construction of a sea port to allow the territory to trade directly without going through Israel.

At the time, Wolfensohn told PBS television in the US that without relatively free movement across its borders, the Gaza strip will be "like a prison". He said that open borders are "crucial" to the future of the Gazan people, because they would provide "a sense of hope, a sense that they are able to earn money, that they can trade". "The balance is always between Israeli security and freedom and hope for the Palestinians."

Israel reneged on almost all of the agreement, with the exception of the crossing to Egypt, and buried the issue under the Hamas election victory.

"It's not a security decision to close the borders, it's a political decision," says Safiya. "This doesn't mean there are not attempts to attack Israel. I'm not denying it happens, but that is not the real reason for closing the border."

The new Israeli defence minister, Amir Peretz, said last week that he will allow exports to resume from Gaza, but the military then announced another security warning and nothing moved. Safiya is suspicious. "The Israeli trick is to get Palestinians to give up on their national demands and worry about the small thing of just surviving," he says. "We had great hope that the situation would improve after withdrawal, but hope is not reality. Our bit of luck is that we are very close to Israel so they cannot let us starve. Their misfortune is that we are so close so they cannot get rid of us."

Hamas offers little hope beyond planning for a siege economy. "We are planning to deal with the current situation and the siege so, yes, we're planning for a siege economy," says Yahir Mousa, a Hamas founder and member of the Palestinian parliament. "One example. We have 8,000 government cars, most of them in the hands of individuals. Every car costs us $20,000 a year. Instead of that I could give the same people money for public transport for less than $1,000 a year. We can stop the consumption of money for nothing."

Many of those who voted for the Islamist party did so because they wanted it to put an end to rampant corruption and mismanagement. What they have got is further economic misery, and Hamas is struggling to find answers. "Europe should not behave with double standards, calling for democracy and then going against the decision of the people," says Mousa. "Palestinians are aware of what is going on. Their reaction is going to support the government and their choice in the face of these pressures from America, Europe and, more importantly, Israel."

Among the few to benefit are the gold shops in the heart of Gaza City. Palestinians have traditionally put their money in to land and gold, and the family jewels are sold only as a last resort. "I assure you that there is no woman in Gaza who has not come to my shop to value her jewellery or sell it off," says Wael al-Sa'idi, who has been in the gold business for 22 years. "This started two months ago but it has increased dramatically over the past month. There are two factors, the difficult economic situation and the gold price is very high."

Sa'idi picks up a wedding ring sold to him that morning. It is a flimsy band of gold so thin that it has rippled from being pulled off the woman's finger. Sa'idi paid 45 shekels (£6) for it. "I'm not telling you she was crying when I bought it but when I looked her in the eye there was a ghost of a tear," he says. "The sad thing is they are not coming in with lots of gold. This morning a woman came in with an earring worth 40 shekels and I gave her 50 because I felt sorry for her because she has less than zero. There are new couples who are getting married and can't afford to buy a ring so they rent it from the shop for three weeks.

"All Gaza goes by my shop. No one gets a taxi any more. People are not going to restaurants. It's the result of the blockade. We don't want aid. We feel like beggars. The world wants us to be dependent on the occupation and aid. How can people live, I wonder?"

Rateeba Shihada, a 59-year-old widow, has kept the money coming in by smuggling cigarettes into Gaza from Egypt. She spends $150 on all the cartons she can carry from just over the border and resells them for double that. Egyptian cigarettes are popular because they are stronger and cheaper than Israeli ones, even with the smugglers' mark-up. "I bring in washing powder and cheese too. They are hard to get here. A lot of people do it," she says.

But on this day, Shihada is selling the gold bracelet her late husband gave her on their wedding day. She gets $1,500 for it, which she tucks into a pink bag around her neck that holds the last of her jewellery. "I sold my gold to buy flour for my children and to pay for my son to finish his education because this is his future. My son is in the last year of university. My dream is my son. He has to graduate whatever the price. He is an engineer," she says. "My bracelet was my dowry. It's a very black day to sell it but I hope it's my last black day."

The gold dealers are buying plenty but selling almost nothing. "We have all this gold," says Sa'idi. "There's only one thing to do with it. We smuggle it out of the country. We use the black market and send it to Egypt or Dubai to earn some money. All of Gaza's gold is disappearing." Earlier this month, a courier carrying gold to Dubai disappeared with the money.

More than 2,700 Palestinians have been killed in the conflict with Israel over the past five years. Nearly one-quarter of the dead are children aged 16 or younger. Some of the children were playing football in the street in full sight of the soldier who pulled the trigger, others were sitting at their desks in school when a stray bullet from an army post crashed into the classroom. About half of those children were shot in the Gaza strip, the bulk in two refugee camps in the south - Rafah and Khan Yunis. The killings were only part of it. Israel bulldozed the homes of thousands of Palestinians along the Egyptian border and around the settlements. It drove out many others with the daily, and more often nightly, barrage of fire into Rafah and Khan Yunis. Nowhere suffered more at the hands of occupation.

And it is here in the south of the Gaza strip that the benefits of withdrawal are felt. Zachia Abu Armana's story highlights how life has improved in Rafah since the Israeli army left. There is not a room in her home without pockmarks from bullets or shrapnel. The entire wall of the kitchen is dotted with holes. When she was lying in bed, she was hit by three pieces of hot flying metal. The family bricked up the windows and moved to the back of the house. When the bowl was smashed by a bullet in the toilet upstairs, they stopped using it. When the army said that everyone on the floors above would be shot, they all moved to the ground floor.

They stayed in their home after Armana's 15- year-old son, Bashir, was shot dead by a soldier while playing football in February 2004. And stayed too when the army killed three of the family's four horses that were used to pull the small wooden carts with which the family made a living hauling goods. But in the middle of 2004, another son, Wael, 20, was shot in the arm and the family finally moved out. Armana and her nine children found rooms in the heart of Rafah, where rents rocketed as families sought to escape the army posts.

"My fear was the house would be destroyed if we left it," says Armana. "It was everything we worked for in life."

The family is now back home. "This is not a house, it's a ruin," she says, but she is overwhelmed with relief. "Every hour I say thank God they are gone. I feel safe now. My children feel safe. I do not have to hear the army shooting and worry every time that one of my children is hit. Safe but there is no work. Safe but there is no money. You get rid of a problem but there are still others."

He said that the Palestinian National Authority will hold contacts with the international quartet to stop the Israeli escalation.

Meanwhile, The Fatah movement called on the Palestinians, basically Jerusalem residents, to travel to the al-Aqsa mosque and defend it.

On the other side of al-Khader is another segment of Wall, meant to separate the village from a high-speed train for Israelis-only that will speed past the village on the way to Tel Aviv. Commissioned by a French company, which has been been boycotted by various groups for their "business interest in the ghettoization of Palestine", the high speed train is being constructed directly on the land of Al Khader and other villages, annexing a large amount of the villagers land for Israel, and completing the circle that will enclose al Khader and neighboring villages into a ghetto.

Once the tunnel on the east side of the villages is completed, all other passages can be closed and the Palestinians who wish to leave their village for work, school, hospital, visits or any other reason will be channelled and controlled (and quite possibly spit on, stoned and shot at by Israelis on the Israelis-only road above, if the experience of Palestinians in Hebron, under a similar arrangement, hae found) under the Jewish-only bypass. 18,000 people in the villages of West Bethlehem will soon be completely isolated. Al-Khader, on the other side of the Wall, will be isolated from lands cultivated with vegetables, grapes and almonds that remain within the boundaries of the West Bethlehem ghetto. Not only will Nahallin, Battir, al-Walaje, Husan and Wadi Fuqin be completely imprisoned, but the Israeli government recently approved the expansion of Betar Illit settlement, which will confiscate much of the villages' remaining lands. The latest plans will expropriate 400 dunum from the Palestinian villages for the sake of Zionist settlers.

The militia, comprising 3,000 gunmen loyal to the militant group, was deployed a week ago over the objections of Palestinian President Mahmoud Abbas of Fatah.

Ten people have been killed in fighting between Hamas and Fatah in the past week.

The rival factions were meeting on Friday in talks intended to reduce the friction between them and stop the violence.

Abbas, who was elected last year, has been in a power struggle with the Hamas government since Hamas won parliamentary elections in January. A key issue in that struggle has been control of the security forces in the Gaza Strip and West Bank.

In response to Abbas's move to take authority over the security forces away from the Interior Ministry, Hamas formed the new security unit and placed a senior militant wanted by Israel in charge.

The friction sparked violence when the force was deployed in Gaza last week.

Tensions have been on the rise across the Palestinian territories since the Palestinian Authority's bank accounts have dried up. Many countries have cut off donations to the Authority, demanding that Hamas renounce violence and recognize Israel's right to exist.

The Hamas-led government hasn't been able to pay its 165,000 employees for nearly three months, causing widespread hardship.

Point of conflict

The other major point of conflict between Fatah and Hamas has been Abbas's insistence that he has the authority to negotiate a peace deal with Israel. On Thursday, Abbas said he would hold a national referendum on the creation of a Palestinian state alongside Israel if Hamas does not agree to the plan within 10 days.

A senior Hamas leader responded on Friday accusing Abbas of "blackmail."

Mohammad Nazzal, a member of the Hamas leadership in exile, didn't reject Abbas's proposal, but said Abbas shouldn't apply pressure in this way.

"We see this referendum as a tool of pressure on Hamas," Nazzal told Reuters, adding the proposal "cannot be used as a way to blackmail Hamas."