The Israeli occupation has a major negative impact on the social, economic and environmental resilience of the Palestinian people. In Palestine, access to natural resources is restricted and policy planning and budgeting instruments are limited. Israel maintains control over most of the underlying determinants of human rights that are prerequisites for achieving adequate standards of living. It controls internal boundaries, air space, sea and, in most areas, restricts infrastructure development and access to resources, including energy, land, water and other natural and cultural assets. Israel also restricts movement of people and goods across and within the Occupied Palestinian Territory (OPT). There is a pressing need to build resilience and foster spatial equality among communities and individuals and to reduce their vulnerability to climate-related events, environmental disasters and socio-economic shocks .​

​Palestine has the opportunity to leverage available resources to develop a climate resilient, resource-efficient and diversified economy, including by fostering a more productive and sustainable agricultural sector.  It can draw on relatively high levels of tertiary education and potential for digital solutions that require less physical resources.  Investing in inclusive and quality health care, education and social protection is key to strengthen the resilience of the most vulnerable. Leaving no one behind requires strengthening systems to ensure inclusive, responsive and quality delivery of public goods and services that address geographic disparities and location-specific needs. Advancing gender equality, prioritizing youth employment, and addressing the needs of people with disabilities will contribute to greater resilience of all Palestinians.  ​

The health care system in Palestine struggles to provide adequate services for the population. Geographical barriers imposed by the occupation (e.g. checkpoints in the West Bank, blockade on the Gaza Strip), as well as violations of the right to health during outbreaks of violence (e.g. targeting first responders and/or health care facilities) have significant impacts on the provision of and access to health services. Gaps in the supply chain management of medical equipment and supplies, particularly in the Gaza Strip, on account of the blockade, also hinder the responsiveness of the Palestinian health care system. The fiscal crisis is also preventing the Ministry of Health (MoH) from ensuring adequate capacities to provide continuous and quality health care services. The range of specialized health services in Gaza and the West Bank is limited, with large gaps in capacities to deliver proper services and to cover their cost. This leaves most of the population who need specialized health services unable to access adequate and timely treatment, particularly in Gaza.​

​A good network of Primary Health Care services and providers (MoH, United Nations Relief and Works Agency for Palestine Refugees in the Middle East (UNRWA), NGOs) provide a base for the expansion and investment of health care to the most vulnerable. Focusing efforts on increasing the local health workforce, while advancing comprehensive health sector reform (including the health insurance system, financial protection, referrals, and social protection), can contribute to filling gaps in the Palestinian health care system.  Adolescents’ health care needs should continue to be addressed, as should the gender, age and disability-specific health care needs of women, the elderly and persons with disabilities, including within the broader social protection system.​

The Palestinian business environment is mainly characterized by micro-  and small-sized formal and informal enterprises, concentrated in low productivity subsectors and operating in fragmented production systems. The occupation-related restrictions on the movement of people and goods both in Gaza and the West Bank, coupled with the limited access to and control over natural resources, contribute to productivity disparities. Dependence on imports and limited access to and competitiveness in local and international markets further hamper growth and engagement in business development activities, particularly for small and informal firms lacking financial support. Progress towards a more productive and inclusive Palestinian economy is hindered by limited focus on market-relevant innovation and technological skills in the education system, a brain-drain of skilled workers to Israel, limited youth participation in technical and vocational education and training and women's involvement in the economy being largely confined to the informal sector.​

​Enabling private sector growth for employment, livelihoods, and poverty reduction requires diversification of the economy and innovation, particularly in high value-added sectors. Promoting import substitution, as well as advancing private sector transition to renewable energy and fostering a resource-efficient agricultural sector, are promising pathways for strengthening the Palestinian economy. Cultural tourism and investing in value-based products (Palestinian narrative) can provide opportunities for economic development unique to the Palestinian context.  Moreover, investing in market-driven skilling within the education system and promoting youth engagement in technical and vocational education and training, while creating more opportunities for women’s economic participation (including through investments in care services and an inclusive work environment), can further drive progress towards an inclusive economy.​

The ongoing Israeli occupation and continued violations of human rights from duty bearers, limited protection from increasingly intensifying violent activities, particularly by settlers, have shaped the current state of increased tension and violence in Palestine. The civic space has been eroding in recent years, and pressure on Palestinian human rights organizations and activists has also been mounting from both the Israeli and Palestinian authorities. Gender-based violence, as well as hate speech against women and women’s rights organizations, continues to be a critical issue needing to be addressed. Inadequate institutional capacities and the intra-Palestinian divide further compound the barriers already posed by the Israeli occupation, limiting the extent to which the State of Palestine can fulfil its obligations, including service delivery, access to justice, promotion of the rights of women and the protection of vulnerable groups at risk of being left behind. ​

​Achieving peace and effective control of the territory is crucial for Palestine to accelerate sustainable development, to reduce humanitarian needs and to build strong institutions. Meanwhile, the Palestinian Authority can take specific measures to protect vulnerable groups and uphold human rights for all, including legal reforms and harmonization efforts, as well as ensuring equitable access to inclusive and responsive legal and social services. Enhancing mechanisms for accountability for conflict-related violence will also enable Palestine to seize these opportunities and progress towards a secure and prosperous future for all.​

The Palestinian government faces a significant lack of transparency and accountability at both national and local levels, leading to eroded citizens' trust.  There is a persisting perception that corruption has increased in the past year, and there is high dissatisfaction with levels of democracy, and a belief that waste or nepotism in access to  public services prevails. In addition, the World Bank’s World Governance Indicators also show that perceptions of government effectiveness were already low and further declined in 2021.  The effectiveness of Palestinian institutions – including their capacity to provide quality and responsive services – is negatively impacted by multiple factors related to the occupation and the internal Palestinian divide, including geographic, political and legal fragmentation and financial and fiscal constraints.​

​Investing in better responsiveness and quality of service delivery, as well as improving public access to information and services (including by leveraging technology and digital innovation), can contribute to increased institutional effectiveness and foster greater public trust. Advancing legal and policy reforms, including towards transparent and efficient management of public resources, as well as enhancing the inclusion of youth, women and other groups in policy and decision-making processes, is also key to strengthen the effectiveness, transparency and accountability of Palestinian institutions.  Additionally, bolstering staff capacities by adopting relevant good practices, and by promoting information-sharing and coordination mechanisms among institutions, will be crucial steps towards achieving these objectives.​