Dramatic steps to improve the Palestinian economy are needed to achieve a lasting peace in the Middle East, a report by the British government said on Monday.
A vicious cycle of poverty and unemployment in the Palestinian territories is a key factor for violence and insecurity, said Ed Balls, one of the report's authors and Prime Minister Gordon Brown's most trusted adviser during his 10 years as Treasury chief.
"For the Palestinians, further economic malaise will only increase humanitarian suffering," said the report. "For the Israelis, economic deterioration in (Palestinian territories) can only increase security risks."
The report, "Economic Aspects of Peace in the Middle East," commissioned by Brown in 2005, said despite international aid worth US$10 billion since 1993, the Palestinian people were getting poorer and 65 percent now live below the poverty line.