For those lucky enough to obtain a permit, a job in Israel can bring in 10 times what they could earn at home, a powerful incentive in an impoverished area where 2.3 million people live squeezed into a narrow coastal strip.

“I have paid my debts, renovated the house and brought some things I had needed,” said Omar Abu Sidu, 31, who has been working in a car wash company in the southern Israeli town of Sderot for the past six months.

According to the World Bank, unemployment in Gaza runs at about 50 percent and more than half the population lives in poverty, exacerbated by repeated bursts of fighting and a years-long economic blockade imposed by both Israel and Egypt.

The application process for permits is often tangled up between offices run by the Islamist Hamas movement and the official Palestinian Authority, which lost control of Gaza in 2007 but which deals with Israeli authorities on the issue.

Some workers also complain that the permits do not give them many normal employment rights, including pensions and accident compensation insurance.

But that has done little to curb demand and the Hamas-run Labour Ministry in Gaza said it had received 100,000 applications for permits since March, when it began to be involved in the application process.

“It has made a big difference,” Abu Sidu said, who had arrived several hours early to go back across the Erez crossing into Israel, where he earns 350-400 shekels ($102-$117) a day, compared with the 40 shekels ($11.60) he was making in Gaza.

The permits were introduced as part of Israel’s twin strategy of enforcing military control while offering some economic benefits to reduce tensions following an 11-day war last year with Hamas, which controls Gaza.

UNCERTAINTY REMAINS

As well as the permits, which analysts say bring in around 7 million shekels ($2 million) a day into Gaza’s economy, Israel has also promised further loosening of economic restrictions, depending on positive signs from Hamas.

Aware of the economic benefits to Gazans but wary of being trapped into making concessions to what Palestinians see as the occupying power, Ehab Al-Ghsain, the Hamas-appointed deputy of the Labour Ministry said Israel’s demands “will not influence our political positions.”

Israeli officials say the permits have forced Gaza’s rulers in Hamas to face a choice between maintaining their fundamental opposition to Israel and giving Palestinians access to well-paying jobs.

“The leadership in Gaza must take a decision,” said Moshe Tetro, head of the Israeli military’s Coordination and Liaison Unit with Gaza. “Do they want civil and economic openness or devastation and destruction?“

Earlier this month, Prime Minister Yair Lapid, who faces a re-election battle in November, said the government may increase the number of permits to 20,000 from some 15,000 at present.

Any further increase would depend on Hamas agreeing to return the remains of missing Israeli soldiers believed to have been killed in Gaza.

For Gazans on the street, the political dispute leaves them exposed to both sudden and unpredictable border closures by Israel and an opaque and difficult-to-understand application process.

“I applied a year ago,” said Hussein Nabhan, a 33-year-old father of six. “Some people applied one or two months ago and they got permits, but we don’t have connections,” he said.

Both Hamas and the Palestinian Authority separately deny there are any bribes or the influence of connections in how people are selected to obtain the permits.

Even for those who navigate the process successfully, much uncertainty remains and while the benefits are welcome, workers are constantly aware that they can be withdrawn at any time.

Last month’s fighting between Israel and the militant Islamic Jihad faction was limited in scope and there was no full blown confrontation with Hamas. But after at least six bouts of conflict since Israel evacuated its forces from Gaza in 2005, there is constant awareness that things can change quickly.

“When there is an escalation, we fear we might not be issued permits again and that we would stop working. We’re on our toes all the time,” said Abu Sidu.

($1 = 3.4258 shekels)