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'In the labor force, one out of six Palestinians in the West Bank and nearly every second person in Gaza were unemployed even before the recent conflict,” said Steen Lau Jorgensen, World Bank Country Director for the West Bank and Gaza, describing it as an unsustainable situation.

“Without immediate action by the Palestinian Authority, donors and the Government of Israel to re-vitalize the economy and improve the business climate, a return to violence as we have seen in recent years will remain a clear and present danger.”

The World Bank said in a statement on Tuesday: “While it is expected from the private sector to play a vital role in creating jobs, the constraints are such that only 11% of formal firms have more than 20 workers compared to 35% in comparable lower-middle income countries.”

 “The recent conflict in Gaza will put further stress on an already struggling Palestinian economy with falling income per capita in 2013, projected to contract further by the end of 2014 according to the latest World Bank update on the state of the Palestinian economy.”