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Updated July 18, 2022
The Palestinians: Overview, Aid, and U.S. Policy Issues

The Palestinians are an Arab people whose origins are in
present-day Israel, the West Bank, and Gaza. Their ongoing
disputes and interactions with Israel raise significant issues
for U.S. policy (see U.S. Policy Issues and Aid below).
After a serious rupture in U.S.-Palestinian relations during
the Trump Administration, the Biden Administration has
reengaged with the Palestinian people and their leaders in
the West Bank-based Palestinian Authority (PA), and
resumed some aid-with hopes of preserving the viability
of a negotiated two-state solution. The Palestinians aspire to
an independent state wit East Jerusalem as its capital.
However, near-term prospects for diplomatic progress
toward Israeli-Palestinian peace reportedly remain dim.
Palestinian leaders lamented some Arab states'
normalization of relations with Israel near the end of the
Trump Administration because it could undermine past
Arab efforts to link such improvements with addressing
Palestinian negotiating demands.
Palestinian domestic politics are dominated by two factions.
Fatah, an Arab nationalist faction, is the driving force
within the Palestine Liberation Organization (PLO), which
represents Palestinians internationally. The Sunni Islamist
group Hamas (a U.S.-designated terrorist organization) has
not accepted PLO recognition of Israel and constitutes the
main opposition to Fatah. Since 2007, the United States and
other Western countries have generally sought to bolster the
Fatah-led PA vis-a-vis Hamas.

Source: Economist Intelligence Unit.
Note: West Bank and Gaza Strip borders remain subject to Israeli-
Palestinian negotiation.
Of the approximately 12.4 million Palestinians worldwide,
about 4.8 million (98% Sunni Muslim, 1% Christian) live in
the West Bank and Gaza. About 1.5 million additional
Palestinians are citizens of Israel, and 6.1 million more live

elsewhere. Of the total Palestinian population, more than 5
million (roughly 44%) are refugees (registered in the West
Bank, Gaza, Jordan, Lebanon, and Syria) whose claims to
land in present-day Israel constitute a major issue of Israeli-
Palestinian dispute. The U.N. Relief and Works Agency for
Palestine Refugees in the Near East (UNRWA) is mandated
by the U.N. General Assembly to provide protection and
essential services to these registered Palestinian refugees,
including health care, education, and housing assistance.
International attention to the Palestinians' situation
increased after Israel's military gained control over the
West Bank and Gaza in the 1967 Arab-Israeli war. Direct
U.S. engagement with Palestinians in the West Bank and
Gaza dates from the establishment of the PA in 1994. For
the past several years, other regional political and security
issues have taken some of the global attention from
Palestinian issues.
Reduced international focus on the Palestinians may affect
their economic conditions. According to the World Bank,
external aid to the PA has declined from 27% of gross
domestic product (GDP) in 2008 to just under 2% in 2021,
contributing to large fiscal deficits that endanger the
economy's sustainability. The International Monetary Fund
estimated end-2021 unemployment as 45% in Gaza and
13% in the West Bank, and has forecast GDP returning to
pre-COVID-19-pandemic levels only near the end of 2023.
Price hikes connected to the Russia-Ukraine war, including
on grain, affect Palestinians alongside others in the region.
Timehne of Key Events Snce 1993
1993-1995      Israel and the PLO mutually recognize each

2000-2005
2004-2005
2005
2006

2007

other and establish the PA, which has limited
self-rule (subject to overall Israeli control) in
the Gaza Strip and specified areas of the
West Bank.
Second Palestinian intifada affects prospects
for Israeli-Palestinian peace, leads to
tightened Israeli security in the West Bank,
and complicates the U.S. third-party role.
PLO Chairman/PA President Yasser Arafat
dies; Mahmoud Abbas succeeds him.
Israel unilaterally disengages from Gaza, but
remains in control of airspace and
land/maritime access points.
Hamas wins majority in Palestinian Legislative
Council and leads new PA cabinet; Israel,
United States, and European Union confine
relations to PA President Abbas.
West Bank-Gaza split: Hamas seizes control
of Gaza Strip; Abbas reorganizes PA cabinet
to lead West Bank; this remains the status
quo to date.

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