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Blockade Forces Gaza Banking Crisis

By Harry Kimball,  Newser Staff

Posted Dec 6, 2008 2:53 PM CST

(Newser) – An ongoing Israeli embargo has cut off cash flow in Palestine's Gaza Strip and forced banks there to close, the Financial Times reports. With a Muslim holiday approaching on Monday, tens of thousands are said to be broke; some stormed an insolvent bank this week, prompting officials to shut down other banks and cash machines. Palestine saw the crisis coming and asked Israel for a cash infusion, but was rebuffed.

Battling Hamas at the time, Israel opted to boost restrictions on the flow of people, money, and goods in and out of Gaza. Hamas has, however, kept paying its members, while the Palestinian Authority was forced to stop cutting checks—deepening the rift between the two groups. Meanwhile, the territory's cash problems have forced aid organizations to curb humanitarian efforts in Gaza.

Palestinian children from the Hamas movement carry a banner in the Gaza Strip.
Palestinian children from the Hamas movement carry a banner in the Gaza Strip.   (AP Photo)
Palestinian children from the Hamas movement burn Israeli and American flags.
Palestinian children from the Hamas movement burn Israeli and American flags.   (AP Photo)
Palestinians pass by a cash machine.
Palestinians pass by a cash machine.   (AP Photo)
Palestinians change money at the black market in Gaza City.
Palestinians change money at the black market in Gaza City.   (AP Photo)
Palestinians from Gaza exchange Israeli shekels, bottom, the currency used in Palestinian territories and Egyptian pounds at the border.
Palestinians from Gaza exchange Israeli shekels, bottom, the currency used in Palestinian territories and Egyptian pounds at the border.   (AP Photo)
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