Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

Israel has said it wants to boost the economy of the Palestinian territories as a way to bring peace. The Israeli leadership has not implemented any specific plan to improve economic conditions, yet the territories are experiencing a marked economic upturn as a halt in violence leads to increased trade and investment.

West Bank's economy

A woman in Islamic veil, speaking in Arabic, has a gleaming smile as she explains she is having trouble deciding on which dish set to buy. She browses through a glitzy showroom boasting European and American brands in a scene that might appear to be a shopping mall in Dubai, Qatar, or New York. In fact, it is Jenin, in the West Bank.

The town until recently was known as a bastion of suicide bombers. But now, with this brand new million-dollar department store, and a shopping mall in the blueprints, Jenin is becoming a haven for shoppers for women like Afaf Rahal, a Palestinian schoolteacher.

She says when she used to go to Amman and other places, she would hope that Palestinians would one day build a department store like this in the West Bank. She says she thanks God her expectations have been exceeded.

The Herbawi department store in Jenin, which was built with Arab investment, is part of what analysts say is a boom that is occurring in the West Bank despite the global slowdown.

They say the reason is security conditions have improved, allowing the wheels of commerce to turn.

Israeli-Palestinian trade improving

Ofir Gendelman heads the Israeli-Palestinian Chamber of Commerce and Industry in Tel Aviv - a new organization set up as trade grows between Israel and the Palestinian territories.

"It is way quieter now in the West Bank than the way it used to be even six months, or 12 months ago," said Gendelman. "It is totally quiet. No terrorist attacks, nothing. The Palestinian security services are doing what they can to prevent attacks and, of course, the Israeli army is doing what it has to do. At the end of the day, when there is quiet, when there is security, the economy will flourish and this is what we see."

Construction projects can be seen just about everywhere. The town of Ramallah is preparing to open a newly-built five-star hotel, the result of European investment.

Improved security has led the Israeli army in the past year to remove more than 140 checkpoints, allowing for the freer flow of people and goods in the West Bank.

The hope on both sides is that trade, which reached $4 billion last year, will continue to grow, generating jobs and prosperity.

Can economic prosperity bring peace?

But there is a long way to go before trust is established. Palestinians say other checkpoints continue to exist, blocking access to jobs and business opportunities for many. Many Palestinians complain they cannot access the markets of Israel's $162-billion economy.

Other obstacles include persistent political attitudes. Many Palestinians view increased trade with the Israelis as collaboration with the enemy. No Palestinian chamber of commerce has been established to foster trade with Israel.

Few Palestinians and Israelis believe that economic prosperity alone will bring peace. They say previous Israeli efforts to boost the Palestinian economy have failed. Analysts say the bloodiest Palestinian uprisings of the late 1980's and in 2000 were preceded by periods of economic growth.

But some, including Ofir Gendelman, see reason for hope in the current upswing.

"It is easier to negotiate with someone who has a normal life, someone who is not desperate, someone who does not feel disenfranchised," added Gendelman. "I think that the betterment of the economic situation in the West Bank has definitely improved the chances to reach a peace deal."

At the shiny new department store in Jenin, Afaf Rahal glows as she browses American and European porcelain dinnerware. She says finding dishes like these here in Jenin is, for her, like a dream.

She says she has seen plates like these in Amman, but was always afraid of carrying them across the border. Now, when she sees them, she says it is like finding a treasure.

For Afaf Rahal this new department store is a sign of hope that life is becoming normal, even in a place like Jenin.

Prime Minister Benjamin Netanyahu angered many Palestinians, in his recent speech, when he proclaimed Israel's intentions to keep Jerusalem as the united capital of the Jewish state. The Palestinians claim the eastern part of the city as the capital of their own future state, but Israeli plans to annex lands east of the city and expand settlements in the occupied West Bank, could preempt that possibility.

Shepherd Mohamad Mussa Mashhur lives on a dry, barren hilltop, within a few meters of power lines. However, a kerosene lamp is what his family depends on for light.

Mashhur says the Israelis came to him and offered him water, electricity and telephone service if he let them put a road by his house. But he said he did not want any of that. He says he does not want a road built through his property.

Mashhur is among Palestinian residents who live on the fringes of a swathe of land to the east of Jerusalem that Israel plans to develop. The Israeli development plan - known as E-1 - seeks to link Jerusalem to Maale Adumim, Israel's largest settlement in the West Bank, by pushing Arab communities away from the connecting road.

With its dry rocky hills, much of this swathe of land resembles a moonscape. Its terrain is barren and unfit for farming, many of its steep jagged hillsides unfit for building.

Yet its political and religious value is such that for years, Israel has been determined to develop it and the Palestinians have been determined not to give it up.

"Natural rights of Jews"

Israel's aim is to protect the contiguity of Jerusalem. Backers of the plan say illegal building by Palestinians threatens to cut off the link between Jerusalem and the settlements including Maale Adumim.

Author Nadav Shragai, a proponent of E-1, says the plan's aim is to guarantee Israelis access to West Bank settlements and to stop Arabs from building in areas east of Jerusalem.

Shragai says the construction will reinforce the Palestinians' demand to create a division of Jerusalem - a division he opposes. He says the Palestinians also look at Jerusalem as a metropolis that belongs to them.

Shragai disputes the Palestinians' claims to the eastern part of Jerusalem as the capital of their future state. In addition to practical issues, Shragai says there is another more compelling cultural reason for Israelis to claim this land.

Shragai points to the issue of principles and values. He says it has been more than 60 years since the creation of the State of Israel. He says Jews are coming back after a worldwide exile of 2,000 years.

For Shragai and other proponents of the plan, the drive to expand to points east is one largely based on religious values and the belief that God gave these lands to the Hebrew people.

Shragai says these are strongly significant places, from the point of view of the history of the biblical land of Israel. He says it is true that there is another population there and he says he and other Israelis do not ignore it. Aside from the practical issue, he says the plan is implementation of what he believes is a natural right of the Jews to return to Israel.

My land, not yours

For Mashhur, this means a separation barrier may soon be built next to his home, cutting him off from the new Jewish communities.

Like many Palestinians, Mashhur was angered by Prime Minister Benjamin Netanyahu's recent speech. The Israeli leader called for Palestinians to accept Israel as a nation state for the Jewish people, in exchange for allowing a Palestinian state. Mashhur says he can never make that concession. Religion for him, too, is a powerful motive.

Mashhur says this land is his grandfathers' land. He was born on this land. He lives on this land. He says this land is Islamic land and he says he will is not going to let non-believers have it. He says it is his.

Annexation

He says Israeli companies have for years offered him substantial sums of money to use his land. He says he has turned all offers down.

He says the Israelis have tried more forceful methods to get him to move.

He walks through heaps and mazes of broken concrete and twisted metal. It is what is left of his earlier home, which Israel declared illegal and bulldozed in 1987. Now, the ruins are a pen for his animals.

In the distance, new homes go up in another West Bank Jewish settlement. Israel says it will not prevent settlers from building new homes to house a naturally growing population.

Although Jewish communities surround him, Mashhur says this to Mr. Netanyahu.

He, says he is not going to recognize Israel in Palestine - not just in Palestine but at all. Mashhur says the problem, as he sees it, is that Jewish immigrants came with much force and much support from outside. He says Palestinians are the weaker side. He says his people have not been able to get support from anyone.

Mashhur takes no comfort in U.S. President Barack Obama's ongoing calls for Israel to freeze settlements.

He waits for the wall to go up.

Israeli warplanes have been attacking the homes of Hamas leaders in Gaza, during the 17th day of Israel's assault. Palestinian medical officials say nearly 900 people have died in the attacks, which are showing no signs of letting up.

The fighting between Israeli forces and Hamas raged on, as thousands of Israeli reservists entered the Gaza Strip.

Israeli ground troops battled militants in house-to-house combat, edging closer to the center of Gaza City.

Israel's attacks on Gaza appeared to be less intense, with military officials saying they carried out fewer than 20 bombings - compared to as many as 40 per night during the past few days.

Israel's aim is to end Hamas' ability to fire rockets at Israeli civilians as it has been doing for years. A spokesman for the Israeli prime minister's office, Mark Regev, says Israel is close to reaching its goals as troops close in on areas of Gaza.

"We are approaching a situation where our goals are being achieved and we think we are approaching the end game," he said.

But even as Israel attacks Gaza on the ground, from the air and from the sea, Hamas is showing no signs of backing down. Militants fired more rockets into southern Israel, including what officials say was a military-grade rocket on the Israeli city of Ashkelon.

Diplomatic efforts are intensifying. Middle East envoy Tony Blair, representing the Middle East Quartet made up of the United States, United Nations, European Union, and Russia, met with Egyptian President Hosni Mubarak in Cairo. He said they discussed details for a ceasefire agreement.

"I think the elements of an agreement for the immediate ceasefire are there. I think they are now being worked on very hard in great detail," said Blair. "This is a sensitive and delicate time in that negotiation, but I hope they will bear fruit and I hope so soon."

Israel is not allowing international journalists to enter Gaza. From inside, residents said conditions are worsening as thousands of traumatized people leave their homes in search of safety.