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Israel has turned the Gaza Strip into a prison for Palestinians where life is "intolerable, appalling, tragic" and appears to have thrown away the key, a United Nations human rights envoy said on Tuesday.

Special rapporteur on human rights in the Palestinian territory John Dugard said that the suffering of the Palestinians was a test of the readiness of the international community to protect human rights.

In response, Itzhak Levanon, Israel's ambassador to the UN in Geneva, rejected Dugard's allegations as "one-sided" and not reflecting reality.

"If ... the international community cannot ... take some action, [it] must not be surprised if the people of the planet disbelieve that they are seriously committed to the promotion of human rights," Dugard said in a statement to the United Nations Human Rights Council.

The South African lawyer, who has been a special UN investigator since 2001, repeated earlier accusations that Israel is breaking international humanitarian law with security measures which amount to "collective punishment."

Israel says its security restrictions, which include the construction of a steel and concrete barrier in the West Bank, are designed to stop suicide bombers entering Israel. Bombings have declined since the barrier was built.

It also maintains tight restrictions on the movement of goods and people into and out of Gaza also due to security measures.

Dugard also attacked the United States, the European Union and Canada for withdrawing funding for the Palestinian Authority in protest at the governing party Hamas's refusal to accept Israel's right to exist.

Hamas, a militant Islamic group that came to power after elections in January, is sworn to Israel's destruction.

"Israel violates international law as expounded by the Security Council and the International Court of Justice and goes unpunished. But the Palestinian people are punished for having democratically elected a regime unacceptable to Israel, the U.S. and the EU," Dugard said.

There was no immediate comment from either Israel or its main ally the United States, but the Palestinian question was due to be debated by the Human Rights Council later on Tuesday.

Past criticism, however, has been strongly rejected by Israel and the United States, which say that the current crisis has been provoked by attacks by Palestinian militants.

Dugard said that three-quarters of Gaza's 1.4 million people were dependent on food aid. Bombing raids by Israel since the June 25 capture of an army corporal by Palestinian militants had destroyed houses and the territory's only power plant.

"Gaza is a prison and Israel seems to have thrown away the key," he said.

The West Bank also faced a humanitarian crisis, albeit not as extreme as Gaza, in part due to the barrier, which Dugard alleged was no longer being justified by Israel on security grounds but was part of a move to annex more land.

Palestinians living between the barrier and the Green Line, the frontier at the end of the 1967 Six Day War, could no longer freely access schools and places of work and many had abandoned local farms, he said.

"In other countries this process might be described as ethnic cleansing but political correctness forbids such language where Israel is concerned," Dugard said.