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MARK AUSTIN THOMAS: Pictures and sounds of fighting between Israel and Hezbollah dominate the news these days. We hear about people fleeing Southern Lebanon and missile strikes in Northern Israel. So it's easy to forget that there's another place in the Middle East where a humanitarian crisis is brewing. The Palestinian territories of the Gaza Strip and the West Bank were suffering before the fighting in Lebanon. Now they've lost a lot of aid from the West by legitimizing Hamas. From London, Stephen Beard has that story.
STEPHEN BEARD: The Palestinians are paying a heavy price for voting a terrorist group into office. The US and the EU cut off aid worth more than $500 million. Israel suspended tax revenues of $50 million a month.
Already the effect on the Palestinians has been dire , says George Joffe of Cambridge University.
GEORGE JOFFE: 40,000 administrators and civil servants simply aren't being paid. And that dramatically increases the level of poverty and misery inside the West Bank and the Gaza Strip.
Hospitals are running low on supplies. The education system is failing. The police force in disarray. The Palestinians, says foreign policy analyst Robert Lowe, are heading for disaster.
ROBERT LOWE: There are regular warnings of serious humanitarian problems as a result of the inability of the Palestinian Authority to pay salaries and to maintain services.
But some cash is now getting into the territories says Neil Partrick of the Economist Intelligence.
NEIL PATRICK: It's dribs and drabs but there are structures in place and informal processes that are just about keeping the Palestinian Authority functioning.
The European Union, with the blessing of the US, has lined up $130 million to ease the emergency. They've just begun paying basic wages to health care workers.
And since the embargo began in March, says Robert Lowe, rich Arab countries have been handing over cash to be smuggled into the Palestinian Authority.
LOWE: There have been extraordinary stories of Hamas officials caught at borders - usually crossing from Egypt into the Gaza strip with thousands of dollars in used notes in their luggage.
But all this is a small percentage of what the Palestinian territories need. There is an obvious way out of course. Hamas renounces terrorism and acknowledges Israel's right to exist, then the aid flows freely again. But that is unlikely in the short term says Patrick:.
PARTRICK: It's very difficult at the moment for Hamas to be seen as compromising effectively in the context of such violence in Gaza and indeed in Lebanon.
The violence, it must be said, was triggered by Hamas kidnapping an Israeli soldier. But most Palestinians wont blame Hamas says Robert Lowe.
LOWE: There's not a keenness to criticize Hamas for the position the Palestinians find themselves in. They will blame the Israelis or they will blame the United States and the West first.
And, says Cambridge university's George Joffe, the lack of Western economic aid for the Palestinians will only make the chances of peace in the Middle East even more remote.
JOFFE: People will become angrier and angrier and eventually that will boil over into more extremism.
The Palestinians will suffer, he says, but so will Israel and its allies.
In London this is Stephen Beard for Marketplace.