The blockade has hampered attempts to repair the sewage system, leaving some without piped water
By Heather Sharp
BBC News, Jerusalem
Two years since Hamas seized control in Gaza, US President Barack Obama has strengthened his calls for an end to the crippling blockade Israel has imposed on the territory.
"If the people of Gaza have no hope, if they can't even get clean water
if the border closures are so tight that it is impossible for reconstruction
then that is not going to be a recipe for Israel's long-term security," he said in his recent speech in Cairo.
Israel says it is aiming to weaken Hamas, the Islamic movement that supports attacks on Israel and is holding its captured soldier, Gilad Shalit, while providing "support" for the civilian population.
Critics say the blockade has served only to punish Gaza's civilian population, destroy the politically more moderate private sector and boosted Hamas with taxes from smuggling tunnels from Egypt.
Some basic foodstuffs and medicine are allowed into Gaza, but the UN says a whole host of other items, from building materials to footballs, musical instruments and lightbulbs, have not been allowed in.
Israel says steel pipes and fertilizer can be used to make the rockets Palestinian militants have fired in hundreds at Israeli towns, while cement can be used to build launching pads.
Other goods are blocked as they are considered "non-essential" or "luxury" items.
Virtually all exports are blocked, which has devastated Gaza's economy, pushing unemployment to 40%. Some 80% of the population live in poverty, if aid is discounted, according to UN figures.
Half Gaza's population depends on UN rations which cover only two-thirds of dietary requirements. Many families have little or no income with which to make up the shortfall.
Restricted fuel supplies for Gaza's power plant mean frequent power cuts; the power, water and sewage systems are in dire need of spare parts.
When the blockade was tightened in June 2007, an Israeli official described the policy in off-the-record comments as "no prosperity, no development, no humanitarian crisis", Michael Bailey of Oxfam told the BBC.
Mark Regev, spokesman for the Israeli Prime Minister Benjamin Netanyahyu, said he had never heard this phrase.
But he said there is not now, and has never been, a humanitarian crisis in Gaza.
In 2008, a group of Western aid agencies called the situation a "humanitarian crisis" and a "humanitarian implosion" - long before Operation Cast Lead damaged thousands of buildings, including schools and hospitals, and killed well over 1,000 people.
GAZA UNDER BLOCKADE: June 2009
750,000 receive Unrwa food aid
No petrol or diesel since Nov 2008 (except UN)
Half required cooking gas allowed
Recently blocked items: light bulbs, candles, matches, books, musical instruments, crayons, clothing, shoes, mattresses, sheets, blankets, tea, coffee, chocolate, nuts
Virtually no building materials allowed in
Source: Unrwa and World Bank
A year later, the World Health Organization says the blockade, Israeli military activity and divided Palestinian leadership had led to "a complex, chronic disaster of catastrophic proportions".
However the situation is described, few in the humanitarian community are optimistic, despite Mr Obama's comments.
Sari Bashi of the Israeli rights organisation Gisha says Israel's past reactions to US pressure have been "words not deeds".
In March, a few weeks after it came to international attention that a shipment of macaroni was blocked, Israel's cabinet voted to end restrictions on food products.
The Ministry of Defence later clarified that "the resolution did not intend to lift the restrictions imposed in the past", although it now says food items enter "almost without restriction" - apart from "gourmet items".
But this month the UN relief agency Unrwa said some food items - including tea, coffee, chocolate and nuts - were still not allowed in.
Last week, Israel's security cabinet said it was examining ways to ease life in Gaza while maintaining Israel's security interests.
A government official who did not want to be named told the BBC one suggestion was shifting from the current situation - a list of items permitted, which changes from month to month - to a list of banned items.
Donkey carts are a common sight in Gaza, where fuel entry is restricted
Aid agencies often complain the policy is too vague and is wasteful if items ordered are then denied entry.
Another option is to re-examine the policy on luxury goods, the official said.
The official said the government would review whether Hamas may be inadvertently benefiting from the blockade, which was "causing a boom time" for people who control the smuggling tunnels.
But the official said there was a risk Hamas could take the credit for any easing of the closures.
He did not mention building materials, which, with $4.5bn in international pledges for reconstruction remaining unspent, are one of the most urgent needs.
Mr Regev says these could be "siphoned off" by Hamas, which he says has happened "countless" times to aid in the past.
But Chris Gunness, spokesman for Unrwa, said the agency has a "watertight" system which has been "tried and tested" to the satisfaction of donor countries.
And Mr Bailey of Oxfam said the major agencies took "all possible steps" to track aid and could be held responsible for doing anything to benefit Hamas under anti-terrorism laws.
But he admitted that there may be "some loss at the margins" if a large volume of goods was involved.
Deliberations over a mechanism for tracking aid are not helped by the deep split between the Palestinian Authority, which Israel will deal with, and Hamas, which it shuns.
And two days before Israel's security cabinet discussed the blockade last week, Palestinian militants attempted what was apparently a major attack near the main fuel crossing - one of the reasons Israel has given in the past for closing crossings.
In the meantime, Mr Bailey says, "it's a humanitarian crisis for the people that have no money or are living in tents because their homes were destroyed".
"And it's a human crisis for one and half million people who don't know where to look for hope."