Palestinian children walk alongside the border with Egypt in the southern Gaza Strip city of Rafah. (Wissam Nassar, Maan Images)

On September 13, 1993, the Declaration of Principles, the first Oslo agreement, was signed. Two weeks later, 42 countries and donor agencies met in Washington to pledge over $2 billion in aid explicitly for the purpose of furthering this "historic political breakthrough in the Middle East."

Since then, aid to Palestinians for development and diplomacy has gone through several stages. The first ended with the breakdown of the Camp David talks in the summer of 2000. Another was introduced with the re-invasion of the West Bank by the Israeli Army in March 2002. Aid was by now largely dispersed for humanitarian purposes and to keep the Palestinian Authority (PA) afloat on condition it "reform" itself. In June of the same year, the "100-Day Reform Plan" was launched.

After several interruptions, including the formation of the short-lived first-ever Hamas government in 2006 and the subsequent unity government, this year has seen nearly $7 billion pledged for a three-year period to support the "Annapolis process." But there has been no development and the political process is stalling.

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The World Bank is very clear about why there is no development. In the several reports the bank has issued on the issue, it ranks the Israeli closure policy in the West Bank - the more than 500 obstacles to movement, including checkpoints, barricades, roadblocks etc. - as the main reason for the lack of investment, rising unemployment and general absence of socioeconomic development in the occupied Palestinian territory.

In several of her 16 visits, US Secretary of State Condoleezza Rice has prodded the Israeli government to ease the closures, but to no avail. Slightly over three months are left until the end of the year, the Annapolis target date for reaching agreement, but hardly anyone is optimistic. And even if a "shelf agreement" is reached, Ehud Olmert, the Israeli prime minister, recently declared that it would only be implemented in stages over a period of 10 years. Such a formula was one of the reasons the Oslo process collapsed.

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