Less than three years ago, Wassif Frahat spent $3 million to open a lavish, two-story restaurant, the Ali Baba. With an impressive, pillared entryway, polished stone floors, glittering chandeliers and colorful frescoes on the high ceilings, the restaurant was his commitment to a better future.
The Ali Baba, in Jenin, is just a few minutes’ drive from the Jalameh checkpoint, which in normal times allows Israeli Arab citizens entry to the West Bank. The atmosphere is Palestinian, and the shops, restaurants and services are significantly cheaper than in Israel. The crossing also allows Palestinians with valid entry permits to go to jobs in Israel.
But after Hamas invaded Israel from Gaza on Oct. 7, the checkpoint was closed. Israel withheld most tax revenue from the authorities in the West Bank, in an effort to weaken them and clamp down more broadly on Palestinians. The economy in the territory’s north collapsed, and the better future that Mr. Frahat expected now seems further away than ever.
The war that followed the invasion is devastating Gaza, but it is also impoverishing the West Bank, which has become a kind of second front in Israel’s battle against Palestinian militancy.
The Palestinian Authority, which administers parts of the West Bank but does not run Gaza, has been paying only about 50 percent of the salaries it owes its estimated 140,000 employees. In the West Bank as a whole, which has a population of about three million, 144,000 jobs have disappeared since October, and 148,000 Palestinians who were working in Israel have lost their jobs, according to the World Bank. Before Oct. 7, unemployment in the West Bank was about 13 percent, compared to 45 percent in Gaza.
Mr. Frahat, 51, once had 53 employees at his restaurant and an older one in the city center. “Now I only have 18 because business is down by 90 percent,” he said.
Israeli Arabs are not his only lost customers; local Palestinians have stopped coming, too. They lack money, he said, and fear continued incursions by Israel’s military. Its forces are trying to tamp down increasing militancy among young armed Palestinians who largely run the sprawling refugee camps in Jenin and the cities of Tulkarm and Nablus.
The Israeli Army killed seven people in a raid in Jenin on July 5, after a larger operation in late May that killed 12.
“People are afraid to leave their homes,” Mr. Frahat said.
In large parts of Jenin, and especially near its refugee camp, Israeli troops using tanks and armored bulldozers have ripped up roads, cut water and sewage pipes, broken power lines and smashed many storefronts and United Nations offices, including a recently renovated medical clinic. The scene is similar in Tulkarm, with its two refugee camps.
Shlomo Brom, a retired Israeli brigadier general and senior researcher at the Institute for National Security Studies, said that the army was engaged in “preventive actions” to head off a new wave of suicide bombings carried out by “armed groups producing explosives.”
Jenin and some of the camps are bastions of armed resistance to the occupation. Israel has conducted frequent raids over the years, but they have become more common since Oct. 7. Israeli officials say the raids are part of counterterrorism operations against Hamas and an extension of the war. Hundreds of Palestinians have been detained.
The raids have piled only more misery on a failing economy. Amar Abu Beker, 49, the chairman of the Jenin Chamber of Commerce, which represents 5,000 businesses, said that 70 percent of them were struggling to stay afloat.
The chamber is working to repair the key roads that Israeli forces have wrecked because the Palestinian Authority has little money for such work, Mr. Abu Beker said. In addition to the damage done by the checkpoint closure, the economy had been constricted by monthslong general strikes in 2022 and 2023 in sympathy with Palestinians killed in Israeli raids.
“The Palestinian Authority is holding on by its fingernails,” Mr. Abu Beker said. “Without money, you can’t operate.”
In a recent report, the World Bank said that the authority’s financial health “has dramatically worsened in the last three months, significantly raising the risk of a fiscal collapse.” It cited the “drastic reduction” in tax transfers from Israel and “a massive drop in economic activity.”
The measures to starve the Palestinian Authority of funds, pushed by far-right members of the Israeli government who want to annex the West Bank and resettle Gaza, have alarmed the Biden administration. U.S. officials want the authority to play a role in running postwar Gaza and worry that an economic crash in the West Bank could lead to more violence.
U.S. officials have pressured the Israeli government to release withheld taxes, which make up about 70 percent of the authority’s income. On July 3, Israel agreed to release $116 million, but the Palestinian Authority said it was owed nearly $1.6 billion.
Anas Jaber, 27, is among the Palestinians who have lost their jobs in Israel. He had been making up to 7,000 shekels a month, or about $1,870, as a housekeeper at a Tel Aviv hotel.
“Now I sit at home and live off savings,” he said. “I’m not married, thank God.” His job has been filled by Filipinos and Indians, and he has applied to move to Canada. “Inshallah,” he said. “I’m sick of checkpoints, and I want to sleep at night.”
There has been no water for a week, he said. Near his mother’s house, where he is staying, is graffiti in Hebrew and Arabic on a bullet-pocked wall that says, “Alleyways of death.”
Um Ibrahim, 60, said she used to get 750 shekels every three months from the Palestinian Authority for medicine to treat her diabetes and high blood pressure.
“For the past nine months, nothing,” she said. “The authority is having an economic crisis, so I’m scared I won’t get any help.” And if it collapses? She laughed bitterly. “OK, then, bye-bye.”
The governor of Jenin, Kamal Abu al-Rub, 58, admitted that with checkpoints closed, first during the Covid pandemic and now after Oct. 7, the city is struggling.
“The veins that let us live are Palestinians from Israel, our lifeblood,” he said, sitting in his large office as an American armored personnel carrier guarded the entrance. The city’s Arab American University is mostly shut now, with only a third of its regular 6,000 students, who in normal times pay rent and shop in stores.
Israel did allow the Jalameh checkpoint to open in late May, but only on Friday mornings, when the shops are closed and most people are at mosques, and on Saturdays from 9 a.m. to 5 p.m.
A large photograph of Mr. Abu al-Rub’s son Shamekh hangs in his office. A doctor who trained in Jordan, Shamekh, then 25, was shot and killed by Israeli troops in November, in nearby Qabatiya, when trying to reach his brother, Muhammad, who had been shot in the leg, Mr. Abu al-Rub said. “They shot my two sons in front of my house,” he said.
He praises the Palestinian security forces, two of whose commanders were in the room monitoring the interview, for keeping law and order on badly reduced salaries. But he acknowledges that the security forces do not maintain a presence in the refugee camps, where Israel says the militants have established control, and he blames Israel for all the trouble.
Asked why young fighters from the camp, known as shabab, sometimes fire on his headquarters, Mr. Abu al-Rub said, “It is Israel that is giving the shabab weapons to fire at the P.A.”
Israeli officials deny such charges but would not comment on individual raids or deaths.
At the entrance to the camp, in the hot sun, Mahmoud Jalmaneh, 56, described how his life had changed as he tried to sell cheap tobacco from a dusty glass cabinet on wheels — 20 cigarettes for 4 shekels, about a dollar, compared to more than $8 for Marlboros, which he does not sell.
Born and raised here, he has seven children, and last July, Israeli troops were caught in a firefight in front of his house and blew it up, he said. “I was a homeowner and now I’m renting, and I have no more money to pay when the landlord comes,” he said.
“The checkpoints are closed; we can’t work in Israel or leave the country,” Mr. Jalmaneh said. “There’s no money, no salaries.”
“We are lonely. We are a people isolated and under occupation. We are fighting the whole world.”
Rami Nazzal contributed reporting from Tulkarm and Jenin, and Natan Odenheimer from Jerusalem.