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Poverty and unemployment in the Palestinian Authority continues to worsen, according to a United Nations annual report to be presented in Geneva Tuesday.

The report relies on data from the Palestinian Central Bureau of Statistics, universities, and research institutes, as well as information collected by International Labor Office Director Juan Somavia during a visit to the PA in early April.

While the PA economy rebounded moderately last year following a very sharp dip, four out of 10 Palestinians in the territories live under the official poverty line of less than $2.10 a day. In addition, the number of poor people in the PA rose from 600,000 in 1999 to 1.6 million in 2005, the new report says.

Open unemployment reached 23.5 percent in 2005. However, based on the number of those who were employed prior to the start of the Palestinian uprising 2000 and are neither employed nor actively seeking work, the ILO estimates the jobless rate to be 40.7 percent of the Palestinian labor force.

Unemployment is not the only concern, however, since the very low rates of labor force participation and employment have become an inherent characteristic of the market. According to the report, 50 percent of men and only 11 percent of women of working age are employed.

Public sector employment, which accounts for 23 percent of total employment, is directly affected by the Palestinian Authority's current inability to pay wages due to its being cut off from international financial support.

The report was prepared for the ILO's International Labour Conference, which opens its annual session in Geneva tomorrow.

"Again, the worsening situation since the end of 2005 urgently requires every effort of the Palestinian Authority, the Israeli government, and the international community to achieve decent work for women and men in the occupied territories", the report says. "The development of a viable Palestinian economy must be a priority."

The pullout from Gaza has created potential for economic and social recovery, but is being hampered by continuing difficulties encountered by Palestinian exporters, the report says.

Referring to an increase in violence, the report concludes that: "Security in all its aspects - physical, social and economic - in Israel, on the one hand, cannot be separated from the same security needs of the Palestinian people living in the occupied territories, on the other."