8 min readAug 31, 2015


Ideology and politics are not the only drivers of Israel’s occupation of Palestinian territory, economics plays an important role too. The Occupied Palestinian Territory (OPT) is rich in natural resources which Israel illegally exploits for its own benefit. This drives the occupation in two important ways:

Israel’s exploitation of resources sustains illegal settlements

Illegal under international law, Israeli settlements represent the primary obstacle to peace. The exploitation of Palestinian natural resources provides the means for them to exist and grow.

They are built on land seized from Palestinians and are supplied with Palestinian water. They establish farms, factories and quarries that harvest resources. In a vicious circle, the income generated from these industries allows settlements to expand further, exploiting yet more resources as they grow.

Source: UN Conference on Trade and Development

Israel‘s exploitation of resources holds back the Palestinian economy

By restricting Palestinians’ access to their own natural resources, Israel is denying them vital economic opportunities, whilst profiting from its own illegal exploitation of them. This unlawful policy obstructs the Palestinian economy and restricts livelihoods. As long as Israeli and foreign companies are able to exploit Palestinian resources with impunity, Israel has a further incentive to continue the occupation.

While serving as a good primer on the effect of Israel’s restrictions on the Palestinian economy, the World Bank video does not provide sufficient context such as what the restrictions are or their humanitarian effects on Palestinians.

Imagine that the occupation is over a glass of water, rather than a piece of territory. As the two sides negotiate, one side is drinking from the glass, making itself stronger as the occupied population grows weaker. When the occupation ends, the glass is empty.

Palestine’s natural resources will not last forever. While the world has been seeking an end to the occupation, Israel has been accelerating its exploitation of Palestinian resources and colonizing more Palestinian land. What will be left when the occupation ends?

Under Israel’s occupation, the Dead Sea is dying, settlements are taking more and more land, quarries are being exhausted, and water aquifers over-exploited. The UN predicts that Gaza could be completely uninhabitable by 2020.

If Palestine loses its natural resources, the end of the occupation will be a hollow victory.


Israel has full control over the West Bank’s resource-rich Area C, over 99 percent of which is either heavily restricted or completely inaccessible to Palestinians because Israel has designated its land for settlements, military zones or nature reserves.

Even where Palestinian development of land is possible, Israel severely limits it, either by refusing to issue permits for construction or by denying access altogether.

Data shows that the combined Israeli restrictions on agriculture cost the Palestinian economy $2.2 billion each year. According to the World Bank, lifting these restrictions would spark a $239 million construction boom, providing vital jobs and housing.

Infographic: The cost of Israeli Restrictions on Palestinian farming
Click to read Al-Haq’s settlement produce report

Land is also the basis for Israeli settlement agriculture, which has flourished in the West Bank. In 2015 Human Rights Watch found that hundreds of Palestinian children as young as 11 years old are employed on these farms, earning as little as $19 per day for grueling and dangerous work. The produce from these settlements is sold around the world, generating vital income that helps sustain their illegal presence and encourage their growth. The EU alone imports $300 million of settlement products each year.


Israel controls the Palestinian water supply, and can turn off the taps at any moment. There are 2.6 million Palestinians and 500,000 Israeli settlers in the West Bank, but the settler population consumes six times as much water as the Palestinian population. To sustain this supply, Israel has consistently over-exploited shared water sources for its own benefit, whilst limiting Palestinian access.

Israel’s national water company, Mekorot, routinely cuts the water supply to Palestinians — sometimes by as much as 50 percent — during the summer months in order to meet demand in the settlements.

Around 200,000 Palestinians in the West Bank have no access to the water network whatsoever. To get the water they need, Palestinians are forced to buy from private companies at extortionate rates, and to dig ‘illegal’ pumps without permits. These are routinely destroyed by Israeli soldiers. Settlers, who are fully connected to the water network pay a minimal rate, and do not require permits.

Click to read Al-Haq’s water report

In Gaza, there is only one source of freshwater, and residents have over-pumped it in order to cope with the inadequate main supply. As a result, 95 percent of water there is now unfit for human consumption due to pollution.

Israeli military operations frequently target water infrastructure in the Gaza Strip, but when the dust settles, Israel blocks the import of construction materials for repairing pumps or building new ones. Damage to infrastructure in the 2014 war left 450,000 Palestinians in Gaza without access to the water network.

Dead Sea Minerals

The Dead Sea’s unique geographical, mineral and climatic features make it rich in natural resources, including potash and bromine, as well as mineral-rich mud that is harvested for lucrative cosmetics industries. Thirty percent (40km) of its shore lies in Palestinian territory, but Israeli restrictions prevent the Palestinians from developing and accessing their shore. Israel meanwhile earns $3 billion each year from Dead sea products, and its 15 hotels on the shore generate around $291 million. Most of these are on a single 6km stretch on the southern coast.

Click to read Al-Haq’s Dead Sea report

The only company licensed by Israel to extract Dead Sea mud is Ahava, which operates out of the settlement Mitzpe Shalem, which receives significant financial subsidies from the Israeli government.

Today, the Dead Sea is in fact two lakes. Israel’s diversion of the water flow to supply its settlements, in combination with the over-use of water for extracting minerals, has caused a dramatic decline in the sea level by an average of 3 feet per year. It was 50 miles long in 1950, but is less than 30 miles long today.

Wastewater, meanwhile, is allowed to flow back into the Dead Sea, and thousands of sinkholes have appeared on its western shores, all threatening its future as an industrial resource, a tourist attraction, and a natural wonder.

Oil and Gas

The US Geological Survey estimates that there are 1.7 billion barrels of recoverable oil and 122 trillion cubic feet of recoverable gas off the Mediterranean coast of Gaza, Israel and Lebanon. If Palestine were allowed to develop its share, it could transform from one of the world’s highest aid recipients to being economically self-sufficient.

Source: Oil and Gas Mediterranean

But Israel has closed off access to Palestine’s territorial waters in order to protect its own gas platforms and pipelines, and routinely attacks, injures and kills Palestinian fishermen in Israel’s unilaterally imposed 6-nautical-mile coastal limit. The Israeli military has also destroyed energy infrastructure across Gaza, including the strip’s lone power station.

As a result, the OPT is almost completely dependent on Israel for its energy. In 2007 alone, Palestine imported 100 percent of its petroleum and 92 percent of its electrical energy from the Israel Electric Corporation.

Israel has meanwhile fast-tracked the development of its own offshore gas reserves in the Tamar and Leviathan gas fields off the Mediterranean, and has unilaterally developed gas fields that span both Israeli and Palestinian waters.

Click to read Al-Haq’s oil and gas report

The land around the West Bank village of Rantis contains vast oil deposits that could also help Palestinians become more self-sufficient, but in 2003 Israel illegally appropriated the land and extended the annexation wall to prevent Palestinians from entering. Meanwhile, Israel has leased the rights to exploit the oil fields that span both Israeli and Palestinian territory without the necessary cooperation from the Palestinian Authority.


Stone is currently Palestine’s largest export industry, earning it the nickname ‘white oil’. However, Palestinian businesses are held back by Israel’s systematic refusal to grant permits for them to open new quarries or renew existing licenses.

The majority of the West Bank’s stone deposits are in Area C. Israeli and international companies operate quarries there, condoned by Israel in contravention of international law. Palestinian businesses, meanwhile, are systematically denied the opportunity to develop and grow.

Yesh Din, an Israeli human rights organisation, has found that 75 percent of the total output from Israeli quarries in the West Bank is used in the Israeli construction industry, despite Israel’s obligation as an occupying power not to use the natural resources of the territory it administers for its own economic benefit.

The world has repeatedly condemned Israel’s actions, and its flaunting of international obligations. But it must turn those words into action. In order to bring Israel into line, Al-Haq calls for international, national and local sanctions that pressure Israel to stop its exploitation of Palestinian natural resources, and put an end to the occupation.

Sanctions could target individuals and companies involved in illegal activity, or forms of trade that support illegal activity.

By severing these links, the international community can protect individuals, businesses and states from collusion with Israel’s illegal activity, and induce Israel to end the occupation.




Independent Palestinian human rights organisation, documenting violations of the individual and collective rights of Palestinians and seeking accountability.