Gaza's unemployment level rose to 45.2% in late 2010, among the highest in the world, a new U.N. report has found.
The UN Relief and Works Agency for Palestine Refugees (UNRWA) found that real wages fell by more than a third, as reported in the BBC.
"These are disturbing trends and the refugees, who make up two-thirds of Gaza's 1.5 million population, were the worst hit," UNRWA spokesman Chris Gunness said in a statement.
"It is hard to understand the logic of a man-made policy which deliberately impoverishes so many and condemns hundreds of thousands of potentially productive people to a life of destitution."
The figure was a slight improvement on the same period in 2009, when unemployment was 45.7 percent. However, it was increase from the first half of 2010 when a building boom helped employment, AFP reports.
The grim employment data comes as Israel's blockade of Gaza enters its fifth year. Israel controls imports into Gaza and restricts access to Israel in an attempt to prevent attacks on its territory and prevent the smuggling of weapons and militants into Gaza.
Israel increased its control over the area in 2006 when Israeli soldier Gilad Shalit was captured by militants. It then tightened its blockade in 2007 after Hamas won elections, ousted its rival Fatah and took charge of the area.
The blockade was intended to hurt Hamas and convince the Palestinian people to elect new leaders. Israel and the United States consider Hamas a terrorist organization and blame it for rocket attacks on Israel.
Despite Israel's efforts, Hamas has only increased its base of support in Gaza.
The report shows that Hamas-run public sector has seen economic growth over the past few years. Hamas has managed to employ tens of thousands of people in government jobs at a time when the private sector has suffered badly.
Gunness told the BBC Hamas has managed to increase public employment by at least one fifth.
Egypt, facing mounting public pressure, recently opened its border with Gaza at Rafah.