WASHINGTON, April 17, 2007, (WAFA)- The World Bank said that Palestinian industry is bound to fail unless Israel lifts tight restrictions on trade and movement of people and goods in the Occupied Palestinian Territories (OPT).

In a study, Monday, on the investment climate in the West Bank and Gaza, World Bank said that the Palestinian producers must move to higher value goods and look beyond Israel to new markets in Europe and the Arab world.

It added that the Palestinian National ( PNA) Authority made some progress in the past 10 years in creating an "enabling investment climate," but Hamas's rise to power last year put a stop to that, according to the study.

Israel has severely tightened travel and trade restrictions since the outbreak of the second Palestinian intifada in 2000. Israel further restricted the movement of goods and people out of Gaza.

The Israeli measures have severed the flow of people and goods between the West Bank and Gaza. The West Bank is carved up by Israel's protective barrier and a network of checkpoints - measures which despite being criticized by some in Israel, have proven to significantly diminish the infiltration of suicide bombers and other terrorists into Israel.

As a result of the protective barrier, Gaza producers have to export through Israel.

The study concluded that restoring free movement and access is a precondition for a viable Palestinian economy, recommending that Israel lift most of the restrictions imposed in recent years. "Without a concerted political effort to re-open markets and lower transaction costs, the Palestinian private sector is bound to fail," it said.

M.H.(10:00 P)(07:00 GMT)