KEY POINTS:
In Gaza City's deserted gold souk, people are not even coming to sell their jewellery any more.
"We just sit and drink tea," said Yasser Moteer, 35, who runs a stall. "It's worse than any time in the 20 years I've been here. It's crazy."
The gold-selling started soon after the international and Israeli boycott of the Hamas-led Palestinian Authority started to plunge Gaza's economy into collapse in March.
But having long ceased to buy here, the poor have nothing left to sell.
Certainly, the 1.3 million population of this ancient coastal strip of territory, a mere 360km, can never have experienced as intense a swing of hope to despair as they have in 12 months.
Ariel Sharon's decision to withdraw Israel's settlers and troops in August last year - for all the criticism that it was unilateral and circumscribed in its genesis and its implementation - made many Palestinians here, almost despite themselves, hope for a better future.
It was not just the sudden freedom to travel from north to south without the endless delays at the hated Abu Houli checkpoint, or that children in the southern town of Khan Younis could run west through what were now the ruins of the Jewish settlement of Neve Dekalim and plunge into a Mediterranean they had only ever dreamed about, or that families could again cross the border at Rafah and reunite with their relatives in Egypt.
It was the sense that for the first time in five dark, stifling and dangerous years, Gaza could breathe, psychologically, and maybe, economically.
As 2006 nears its close it is easy to see how cruelly those hopes have been mocked by what has happened.
Since Hamas and other Gaza militants seized Israeli corporal Gilad Shalit and killed two of his comrades in June, shells, drones and machinegun-fire from Israeli forces have killed some 400 Palestinians, including civilians, women and children, in a conflict overshadowed by the war in Lebanon.
For five long months, electricity was cut to eight hours a day, damaging water supplies, after a surgically accurate bombing, condemned by Israelis and foreign human rights groups as collective punishment in breach of humanitarian law.
Reaching a peak in July, the use of sonic booms - often deliberately timed as children were going to school - created misery and fear.
As if that was not enough, civilians, including children, have been killed or wounded in the sporadic fighting between Fatah and Hamas, the two dominant factions in Palestinian politics, or in battles between families.
For the immediate survivors of the Israeli shells that killed 17 members of the Athamneh family as they tried to flee their home in Beit Hanoun three weeks ago, the bereavement is, if anything, harder to bear now.
In the now eerily peaceful alley where the carnage was perpetrated, Hayat Athamneh, 56, a strong woman who lost three adult sons - all fathers themselves - sat with their still-devastated and injured brother Amjad, 31, and his wife, who lost their own son Mahmoud, 10.
"Now I feel it," says Hayat, covering her eyes as they fill with tears. "It wasn't so bad at the beginning. There were a lot of people around. Now there is nobody."
As she reels off the list of Palestinian and foreign dignitaries who had visited the site, her daughter-in law Tahani, 35, says: "They all came. But nothing happened."
Her brother-in-law Majdi Athamneh, who lost his 12-year-old son Saad, says not only do the extended family fear to go back to their shelled house because of the structural damage, but they no longer think they should live together as they had.
"When so many members of one family were killed, it is better to make sure it doesn't happen again and live apart."
Eight kilometres away in Gaza City, Adeeb Zarhouk, 44, is a man used to hard work and 4am starts to support his wife Majda, 44, and their seven children. For 20 years he was employed in Israel as a freelance metalworker and electrician, and then for five working for an Israeli company in the now flattened Erez industrial zone on the northern edge of Gaza.
But this morning he apologises for being asleep when we call.
Each day, he hopes for a request to install a TV satellite or do another odd job. "But the phone hasn't rung for two weeks. Nobody has any money to do these things."
Zarhouk is the human face of the 64 per cent increase in "deep poverty" among Palestinian refugees in the past year.
He is naturally cheerful but, as his wife prepares a three-shekel (about $1) family breakfast of beans, felafal and a few tomatoes, he says: "When I'm at home by myself I start crying. When your son asks you for half a shekel and you don't have it ... "
Zarhouk gets up to wash the tears from his eyes. Then he says that although as a refugee he earned US$240 ($349) a month on a three-month UNRWA (United Nations Relief and Works Agency) job programme, he now owes $540 in rent.
Who does Zarhouk, who voted Fatah in the last election, blame? "I blame democracy," he says with a flash of sarcasm. "The whole world wanted us to have democracy and said how fair had been our election. The problem is they didn't like our result."
The world's boycott of the Palestine Authority since those elections ended salaries for the PA employees on whose Gaza's economy disproportionately depends. The highly professional, if desperately under-equipped, health service is suffering.
In her bed at Shifa hospital, Intisar al Saqqa is waiting for the drug Taxoter which doctors say she needs to treat breast cancer which has spread to her lung and her liver.
"Every week, they say it will come on Monday," says her mother, Hadra, 62. "But it doesn't."
The agreement Condoleezza Rice persuaded Israel to sign a year ago to free the passage of goods and people into and out of Gaza has not been implemented.
The UN's Office of Co-ordination of Humanitarian Affairs said Gaza's access to the outside world was "extremely limited" and commercial trade "negligible". That is diplomatese for saying Gaza is a prison again.
Now, with talks between Hamas and Mahmoud Abbas apparently past collapse, there is little hope, and plenty to do for the NGOs and charities trying to keep Gaza alive.
- INDEPENDENT
