MELISSA BLOCK, host:
Secretary of State Condoleezza Rice is in Jerusalem for talks with Israeli and Palestinian leaders. It's her first visit to the area since the Islamist group Hamas seized control of the Gaza Strip in June. Rice is trying to bolster the emergency government set up in the West Bank by Hamas rival, Fatah.
And as NPR's Eric Westervelt reports, the political divide between Gaza and the West Bank is widening, and the U.N. is warning that the economy of Gaza will collapse unless Israel reopens the main commercial crossing point.
ERIC WESTERVELT: When the Karni commercial crossing point is open, the Mushtaha(ph) furniture factory buzzes with more than 70 workers busily building wooden desks, tables and chairs that are sold to several Israeli companies. But these days, the factory is a desolate place with just a few machines buzzing in the background. Owner Abu Abad Mushtaha(ph) says he moved to the industrial zone near the terminal to be able to quickly export his product to the Israelis he does business with and to quickly import vital raw supplies.
Mr. ABU ABAD MUSHTAHA (Businessman): (Through translator) All the raw materials come from Israel, from the small screws to the wood. Everything comes from Israel.
WESTERVELT: But Israel hasn't allowed any new industrial materials to come in since Hamas forcibly took over Gaza in mid-June. Mushtaha says, by contract, he now faces steep daily fines for every piece of furniture he fails to deliver on time. He's already laid off most of his workers.
Mr. MUSHTAHA: (Through translator) I'm facing the real danger of closing my shop completely and releasing all the workers.
WESTERVELT: According to figures from the Palestinian Federation of Industries, 80 percent of Gaza's factories are either closed down since the Hamas takeover prompted Israel to seal off Karni.
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WESTERVELT: These days, the main United Nations food distribution center in Gaza City is a busy and tensed place. A minor fight breaks out as Gaza residents queue up, their U.N. coupons in hand, for free bags of flour and cooking oil. This emergency food and medical assistance continues to pour in to Gaza from Israel and aid agencies through two smaller crossing points. In Gaza, there is no humanitarian crisis.
Mr. JOHN GING (Director, UNRWA, Gaza): But the economic collapse is something completely separate. There are no commercial imports or exports occurring here at all.
WESTERVELT: John Ging is the Gaza director of the lead U.N. agency here. He warns that unless some operational solution is found to reopen Karni, Gaza's economy will further disintegrate.
Mr. GING: The businesses are collapsing. Over 70,000 have lost their jobs in the last couple of weeks. And the remaining will inevitably lose their jobs in the next few weeks if the remaining businesses cannot trade.
WESTERVELT: And if that happens, Ging says, he'll see even longer lines for his agency's food and fuel handouts. Already, the U.N. provides direct food aid to more than a million of Gaza's nearly 1.5 million residents.
Hamas now controls access to all of the crossing points, which have been attacked by militants in the past. Israeli officials say it's just too big a security risk to reopen Karni now. As Israeli government spokesman Mark Regev put it, Israel will be ready to reopen when the Palestinians get their house together regarding security at the crossings.
Ashraf Jirada(ph) is the Palestinian director of the now-closed Karni terminal. He spends his days phoning businessmen and Fatah officials in the West Bank capital of Ramallah, trying to find a way to reopen Gaza's economic lifeline.
Mr. ASHRAF JIRADA (Former Director, Karni Terminal): (Through translator) The only possibility is a dialogue between Ramallah and Gaza. That's the only way Karni can be reopened.
WESTERVELT: But there is no real dialogue. It's not even clear Fatah leaders in the West Bank are doing much to try to reopen Karni. One Palestinian newspaper editorialized that the Gaza crossing is now a key bargaining chip Fatah can use to punish Hamas.
The U.N.'s John Ging says Karni was economically neutrally beneficial to Israeli and Palestinian companies. That potential base for a wider peace, he warns, is now falling apart.
Mr. GING: At the moment, we have Gazan businessmen who are in a very productive and cooperative relationship with their Israeli counterparts. This is what you built peace process upon. And if those links are closed, then there is no relationship between Gazans and Israelis other than a violent relationship.
Eric Westervelt, NPR News, Gaza.