In a report issued on Tuesday ahead of a meeting of global donors in Brussels on March 19, the World Bank explored the long-term damage to the Palestinian economy as a result of the worsening financial crisis facing the Palestinian Authority and warned that the fiscal stress "could worsen in 2013."

"While urgent attention to the short-term financing shortfalls is essential, it is important to recognize that the continued existence of a system of closures and restrictions is creating lasting damage to economic competitiveness in the Palestinian Territories," the report concluded.

"The longer the current, restrictive situation persists, the more costly and time-consuming it will be to restore the productive capacity of the Palestinian economy." (AFP)