GAZA CITY - Psychiatrist Eyad el-Sarraj can be as caustic as any Palestinian in condemning Israel's 40-year occupation of the Gaza Strip. But he speaks with admiration approaching awe of Israelis' kindness during his own bone marrow treatment two years ago at Chaim Sheba Medical Center in Tel Hashomer, outside Tel Aviv. Other Palestinians there got similar attention, he says, adding, "This is something I will never forget."
Business consultant Sami Abdel-Shafi has heard sentiments similar to Mr. el-Sarraj's from older laborers who used to be allowed to work in Israel. But younger people haven't had the same exposure and harbor a darker view, he says. Indeed, the prospect that many Gazans will again recognize human qualities in Israelis is shrinking, and with it the chance of reconciliation between two peoples that is essential for lasting peace.
Each day the divide widens. Palestinian militants fire crude rockets that occasionally kill and more often terrorize Israeli civilians. Israel retaliates with airstrikes and incursions that target militants but frequently cause civilian casualties.
"We are stepping into a generational catastrophe," says Mr. Abdel-Shafi, a moderate political independent. "You have two generations who regard Israel as an enemy because they haven't seen anything otherwise."
It could get worse. As cease-fire talks stall, Israel says Gaza's militants, some trained by Iran, are smuggling more-sophisticated arms. There is repeated talk of a major Israeli military operation.
History suggests such a move won't quell the violence for long, and that with Gaza's close proximity to Israel, it will remain a festering sore and a threat.
Yet no one - not the divided Palestinian leadership, Israel, neighboring Egypt or the United States - seems to know what to do about Gaza, home to nearly 1.5 million people, a large majority of whom are members of families that fled or were driven from Israel in 1948.
Former Israeli Prime Minister Ariel Sharon thought he knew. He emptied the coastal strip of Jewish settlers in 2005 and withdrew the soldiers, internal checkpoints and watch towers that guarded them.
James Wolfensohn thought he knew. He was the former World Bank president who worked strenuously in 2005 to make sure Gaza's economy could thrive and grow after disengagement, even putting his own money into the effort. Other investors joined in.
But with America's acquiescence, Israel refused to combine its "disengagement" with a peace process with the Palestinians that would link the West Bank and Gaza and allow a new nation to be born. A partial step allowing Gazans to move goods and labor to and from Israel was never seriously implemented. Israel only partially dismantled its occupation, continuing to control Gaza's borders, airspace and coast.
The strip's vaunted economic recovery sputtered. That was likely part of the reason that Palestinians in early 2006 voted to replace their Fatah-led government, long seen as inept and corrupt, with the Islamist Hamas movement. The United States, which views Hamas as a terrorist group, refused to accept the result. It imposed a tight financial squeeze that denied Hamas leaders access to the international banking system.
Militants grew bolder, capturing a young Israeli soldier in a daring cross-border operation. A Saudi-brokered Palestinian unity government foundered. In bloody pitched battles, Hamas a year ago overwhelmed Fatah's security forces and took full control of the strip.
For its pains, Hamas now rules a population sinking deeper into poverty. An Israeli economic embargo blocks Gazans from day labor in Israel and the trade in goods and raw materials that once sustained the strip's thousands of greenhouses, shops, garment and furniture factories and builders. The lifelines are supplies of donor-funded food, some medicines and modest amounts of fuel, stipends paid to idled Palestinian Authority employees and a black market. Although Israel still admits urgent Palestinian medical cases to its world-class hospitals, bursts of violence, such as last week's suicide truck bombing near the Erez border crossing, delay passage.
A few miles south of the empty luxury Movenpick hotel, on what used to be one of Gaza's most inviting beaches, a ravine of sewage fouls the Mediterranean, part of what the U.N. estimates is a more than 15-million-gallon-a-day discharge. Treatment plants can't operate effectively because of frequent power cuts caused by fuel shortages, according to the U.N.'s humanitarian agency. The few visitors who enter Gaza through the huge, high-tech Erez crossing point encounter a moonscape of demolished buildings, abandoned fields and near-empty roads.
Eyad el-Sarraj, founder and head of the Gaza Community Mental Health Program, has spent years recording the traumatic psychological impact of the Israeli-Palestinian conflict on local families. Now he describes something dangerous eating into Gazan society itself. One symptom revealed itself during factional fighting a year ago. Mr. el-Sarraj compares how he was treated in an Israeli hospital with the "viciousness" displayed here. In the heat of battle, wounded fighters were pursued inside hospitals and killed, he said. "There is a process we can call disintegration [in] every aspect of life in Gaza today," he says.
Sami Abdel-Shafi clings to hope of an alternative. The son of a surgeon and nephew of the late Haidar Abdel-Shafi, a respected Gaza elder statesman, he gave up a Silicon Valley career in 2003 to start a consulting business in Gaza with his cousin Salah, an economist. He recently prepared a report on Gaza investment opportunities for an international conference in Bethlehem. It touts the territory's "skilled and highly motivated labor force" and potential growth in agriculture, trade, light industry, information technology, construction and real estate development, subcontracting and consulting. Gaza's adaptable private sector, it notes dryly, "has great resistance to failure."
But for now, failure has the upper hand.
Mark Matthews, a former diplomatic and Middle East correspondent for The Sun, is the author of "Lost Years: Bush, Sharon and Failure in the Middle East." His e-mail is firstname.lastname@example.org.