The September 1993 Israel-PLO Declaration of Principles on Interim Self-Government Arrangements provided for a transitional period of Palestinian self-rule in the West Bank and Gaza Strip.
Under a series of agreements signed between May 1994 and September 1999, Israel transferred to the Palestinian Authority (PA) security and civilian responsibility for Palestinian-populated areas of the West Bank and Gaza. Negotiations to determine the permanent status of the West Bank and Gaza stalled following the outbreak of an intifada in September 2000, as Israeli forces reoccupied most Palestinian-controlled areas.

(CBS)
In April 2003, the Quartet (US, EU, UN, and Russia) presented a roadmap to a final settlement of the conflict by 2005 based on reciprocal steps by the two parties leading to two states, Israel and a democratic Palestine. The proposed date for a permanent status agreement was postponed indefinitely due to violence and accusations that both sides had not followed through on their commitments. Following Palestinian leader Yasir ARAFAT's death in late 2004, Mahmud ABBAS was elected PA president in January 2005.
A month later, Israel and the PA agreed to the Sharm el-Sheikh Commitments in an effort to move the peace process forward. In September 2005, Israel unilaterally withdrew all its settlers and soldiers and dismantled its military facilities in the Gaza Strip and withdrew settlers and redeployed soldiers from four small northern West Bank settlements. Nonetheless, Israel controls maritime, airspace, and most access to the Gaza Strip.
A November 2005 PA-Israeli agreement authorized the reopening of the Rafah border crossing between the Gaza Strip and Egypt under joint PA and Egyptian control. In January 2006, the Islamic Resistance Movement, HAMAS, won control of the Palestinian Legislative Council (PLC). The international community refused to accept the HAMAS-led government because it did not recognize Israel, would not renounce violence, and refused to honor previous peace agreements between Israel and the PA.

(CBS)
HAMAS took control of the PA government in March 2006, but President ABBAS had little success negotiating with HAMAS to present a political platform acceptable to the international community so as to lift economic sanctions on Palestinians.
The PLC was unable to convene throughout most of 2006 as a result of Israel's detention of many HAMAS PLC members and Israeli-imposed travel restrictions on other PLC members. Violent clashes took place between Fatah and HAMAS supporters in the Gaza Strip in 2006 and early 2007, resulting in numerous Palestinian deaths and injuries. ABBAS and HAMAS Political Bureau Chief MISHAL in February 2007 signed the Mecca Agreement in Saudi Arabia that resulted in the formation of a Palestinian National Unity Government (NUG) headed by HAMAS member Ismail HANIYA.
However, fighting continued in the Gaza Strip, and in June, HAMAS militants succeeded in a violent takeover of all military and governmental institutions in the Gaza Strip. ABBAS dismissed the NUG and through a series of Presidential decrees formed a PA government in the West Bank led by independent Salam FAYYAD.
HAMAS rejected the NUG's dismissal and has called for resuming talks with Fatah, but ABBAS has ruled out negotiations until HAMAS agrees to a return of PA control over the Gaza Strip and recognizes the FAYYAD-led government. FAYYAD and his PA government initiated a series of security and economic reforms to improve conditions in the West Bank.
ABBAS participated in talks with Israel's Prime Minister OLMERT and secured the release of some Palestinian prisoners and previously withheld customs revenue. During a November 2007 international meeting in Annapolis Maryland, ABBAS and OLMERT agreed to resume peace negotiations with the goal of reaching a final peace settlement by the end of 2008.
Source: CIA World Fact Book
Gaza Strip

(AP)
Population: 1,500,202 (July 2008 est.)
Age structure: 0-14 years: 44.7% (male 343,988/female 325,856)
15-64 years: 52.7% (male 403,855/female 386,681)
65 years and over: 2.7% (male 16,196/female 23,626) (2008 est.)
Median age: total: 17.2 years
male: 17 years
female: 17.4 years (2008 est.)
Population growth rate: 3.422% (2008 est.)
Birth rate: 37.75 births/1,000 population (2008 est.)
Death rate: 3.53 deaths/1,000 population (2008 est.)
Net migration rate: 0 migrant(s)/1,000 population (2008 est.)
Sex ratio: at birth: 1.05 male(s)/female
under 15 years: 1.06 male(s)/female
15-64 years: 1.04 male(s)/female
65 years and over: 0.69 male(s)/female
total population: 1.04 male(s)/female (2008 est.)
Infant mortality rate: total: 19 deaths/1,000 live births
male: 20.22 deaths/1,000 live births
female: 17.72 deaths/1,000 live births (2008 est.)
Life expectancy at birth: total population: 73.16 years
male: 71.6 years
female: 74.83 years (2008 est.)
Total fertility rate: 5.19 children born/woman (2008 est.)
HIV/AIDS - adult prevalence rate: NA
HIV/AIDS - people living with HIV/AIDS: NA
HIV/AIDS - deaths: NA
Nationality: noun: NA
adjective: NA
Ethnic groups: Palestinian Arab
Religions: Muslim (predominantly Sunni) 99.3%, Christian 0.7%
Languages: Arabic, Hebrew (spoken by many Palestinians), English (widely understood)
Literacy: definition: age 15 and over can read and write
total population: 92.4%
male: 96.7%
female: 88% (2004 est.)
School life expectancy (primary to tertiary education): total: 14 years
male: 13 years
female: 14 years (2006)
Education expenditures: NA
West Bank
Population: 2,407,681
note: in addition, there are about 187,000 Israeli settlers in the West Bank and fewer than 177,000 in East Jerusalem (July 2008 est.)
Age structure: 0-14 years: 38% (male 469,754/female 445,999)
15-64 years: 58.3% (male 719,267/female 684,790)
65 years and over: 3.6% (male 36,606/female 51,265) (2008 est.)
Median age: total: 20.2 years
male: 20 years
female: 20.4 years (2008 est.)
Population growth rate: 2.225% (2008 est.)
Birth rate: 25.95 births/1,000 population (2008 est.)
Death rate: 3.7 deaths/1,000 population (2008 est.)
Net migration rate: 0 migrant(s)/1,000 population (2008 est.)
Sex ratio: at birth: 1.06 male(s)/female
under 15 years: 1.05 male(s)/female
15-64 years: 1.05 male(s)/female
65 years and over: 0.71 male(s)/female
total population: 1.04 male(s)/female (2008 est.)
Infant mortality rate: total: 16.51 deaths/1,000 live births
male: 18.5 deaths/1,000 live births
female: 14.39 deaths/1,000 live births (2008 est.)
Life expectancy at birth: total population: 74.29 years
male: 72.32 years
female: 76.38 years (2008 est.)
Total fertility rate: 3.31 children born/woman (2008 est.)
HIV/AIDS - adult prevalence rate: NA
HIV/AIDS - people living with HIV/AIDS: NA
HIV/AIDS - deaths: NA
Nationality: noun: NA
adjective: NA
Ethnic groups: Palestinian Arab and other 83%, Jewish 17%
Religions: Muslim 75% (predominantly Sunni), Jewish 17%, Christian and other 8%
Languages: Arabic, Hebrew (spoken by Israeli settlers and many Palestinians), English (widely understood)
Literacy: definition: age 15 and over can read and write
total population: 92.4%
male: 96.7%
female: 88% (2004 est.)
School life expectancy (primary to tertiary education): total: 14 years
male: 13 years
female: 14 years (2006)
Education expenditures: NA
Gaza Strip
321177
High population density, limited land access, and strict internal and external security controls have kept economic conditions in the Gaza Strip - the smaller of the two areas under the Palestinian Authority (PA)- even more degraded than in the West Bank. The beginning of the second intifada in September 2000 sparked an economic downturn, largely the result of Israeli closure policies; these policies, which were imposed to address security concerns in Israel, disrupted labor and trade access to and from the Gaza Strip. In 2001, and even more severely in 2003, Israeli military measures in PA areas resulted in the destruction of capital, the disruption of administrative structures, and widespread business closures. The Israeli withdrawal from the Gaza Strip in September 2005 offered some medium-term opportunities for economic growth, but continued Israeli-imposed crossings closures, which became more restrictive after Hamas violently took over the territory in June 2007, have resulted in widespread private sector layoffs and shortages of most goods.
GDP: purchasing power parity - $5.034 billion (includes West Bank) (2006 est.)
GDP - real growth rate: 8% (includes West Bank) (2006 est.)
GDP - per capita: $1,100 (includes West Bank) (2006 est.)
GDP - composition by sector: agriculture: 8%
industry: 13%
services: 79% (includes West Bank) (2006 est.)
Labor force: 267,000 (2006)
Labor force - by occupation: agriculture: 12%
industry: 18%
services: 70% (2005)
Unemployment rate: 34.8% (2006)
Household income or consumption by percentage share: lowest 10%: NA%
highest 10%: NA%
Budget: revenues: $1.149 billion
expenditures: $2.31 billion
note: includes West Bank (2006)
Inflation rate (consumer prices): 3.6% (includes West Bank) (2006)
Commercial bank prime lending rate: 7.73% (31 December 2006)
Stock of money: $1.574 billion (31 December 2007)
Stock of quasi money: $3.048 billion (31 December 2007)
Stock of domestic credit: $1.455 billion (31 December 2007)
Agriculture - products: olives, citrus, vegetables; beef, dairy products
Industries: generally small family businesses that produce textiles, soap, olive-wood carvings, and mother-of-pearl souvenirs; the Israelis had established some small-scale modern industries in an industrial center, but operations ceased prior to Israel's evacuation of Gaza Strip settlements
Industrial production growth rate: 2.4% (includes West Bank) (2005)
Electricity - production: 140,000 kWh (2005)
Electricity - consumption: 230,000 kWh (2005)
Electricity - exports: 0 kWh (2005)
Electricity - imports: 90,000 kWh; note - from Israeli Electric Company (2005)
Exports: $301 million f.o.b.; (includes West Bank) (2005)
Exports - commodities: citrus, flowers, textiles
Exports - partners: Israel, Egypt, West Bank (2006)
Imports: $2.44 billion c.i.f.; (includes West Bank) (2005)
Imports - commodities: food, consumer goods, construction materials
Imports - partners: Israel, Egypt, West Bank (2006)
Debt - external: $NA
Currency code: new Israeli shekel (ILS)
Exchange rates: new Israeli shekels (ILS) per US dollar - 4.14 (2007), 4.4565 (2006), 4.4877 (2005), 4.482 (2004), 4.5541 (2003)
Fiscal year: calendar year
West Bank
The West Bank - the larger of the two areas comprising the Palestinian Authority (PA) - has experienced a general decline in economic conditions since the second intifada began in September 2000. The downturn has been largely a result of Israeli closure policies - the imposition of closures and access restrictions in response to security concerns in Israel - which disrupted labor and trading relationships. In 2001, and even more severely in 2002, Israeli military measures in PA areas resulted in the destruction of capital, the disruption of administrative structures, and widespread business closures. International aid of at least $1.14 billion to the West Bank and Gaza Strip in 2004 prevented the complete collapse of the economy and allowed some reforms in the government's financial operations. In 2005, high unemployment and limited trade opportunities - due to continued closures both within the West Bank and externally - stymied growth. Israel's and the international community's financial embargo of the PA when HAMAS ran the PA during March 2006 - June 2007 has interrupted the provision of PA social services and the payment of PA salaries. Since June the Fayyad government in the West Bank has restarted salary payments and the provision of services but would be unable to operate absent high levels of international assistance.
GDP (purchasing power parity): $5.034 billion (includes Gaza Strip) (2006 est.)
GDP (official exchange rate): $5.328 billion (includes Gaza Strip) (2006 est.)
GDP - real growth rate: -8% (includes Gaza Strip) (2006 est.)
GDP - per capita (PPP): $1,100 (includes Gaza Strip) (2006 est.)
GDP - composition by sector: agriculture: 8%
industry: 13%
services: 79% (includes Gaza Strip) (2006 est.)
Labor force: 605,000 (2006)
Labor force - by occupation: agriculture: 18%
industry: 15%
services: 67% (2006)
Unemployment rate: 18.6% (2006)
Household income or consumption by percentage share: lowest 10%: NA%
highest 10%: NA%
Budget: revenues: $1.149 billion
expenditures: $2.31 billion
note: includes Gaza Strip (2006)
Inflation rate (consumer prices): 3.6% (includes Gaza Strip) (2006)
Commercial bank prime lending rate: 7.73% (31 December 2006)
Stock of money: $1.574 billion (31 December 2007)
Stock of quasi money: $3.048 billion (31 December 2007)
Stock of domestic credit: $1.455 billion (31 December 2007)
Agriculture - products: olives, citrus, vegetables; beef, dairy products
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
Industrial production growth rate: 2.4% (includes Gaza Strip) (2005)
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; some Palestinian municipalities, such as Nablus and Janin, generate their own electricity from small power plants
Electricity - consumption: NA kWh
Electricity - imports: NA kWh
Exports: $301 million f.o.b.; (includes Gaza Strip) (2005)
Exports - commodities: olives, fruit, vegetables, limestone
Exports - partners: Israel, Jordan, Gaza Strip (2006)
Imports: $2.44 billion c.i.f.; (includes Gaza Strip) (2005)
Imports - commodities: food, consumer goods, construction materials
Imports - partners: Israel, Jordan, Gaza Strip (2006)
Debt - external: $NA
Market value of publicly traded shares: $4.461 billion (2005)
Currency (code): new Israeli shekel (ILS); Jordanian dinar (JOD)
Exchange rates: new Israeli shekels (ILS) per US dollar - 4.14 (2007), 4.4565 (2006), 4.4877 (2005), 4.482 (2004), 4.5541 (2003)
middle east headlines
world headlines
Interactive
Mideast ConflictEvents, key players and a history of the world's most unstable region.

Photo Essay
Israel Hammers Gaza
Palestinian militants launch rocket attacks, Israel hits back hard.
More In-depth