JERUSALEM. Dec 11: fiTwentysix years of Israel occupation have forced the occupied territories economy into com plete dependence on Israel, but Palestinians hope to lessen it through the limited autonomy deal, reports AFP.

A detailed World Bank report this year said the Palestinian economy ' remains highly vulnerable' vis-a-vis Israel, and analysis echoed by the Bank of Israel.

But Palestinian economists like Samir Hulleileh blame a " colonial system."

Banjamin Gaon, who heads Israel's leading industrial group Koor recently described the occupied territories as " a third world enclave in the Israeli economy" and spoke of the Palestinians' near-total dependence.

The figures are self-explanatory. Israel provides all the territories' electricity and energy and has become their quasl-ex-clusive trading partner.

Jordan, which In 1968 bought 45 per cent of Palestinian exports took In a mere 15 per cent per cent in 1991. The Israeli market currently absorbs more than 80 per cent of Palestinian exports.

This dependence Is seen in the growing number of Palestinian sub-contractors to Israeli firms, notably In the textile and building industries.

The result: Israel has a one billion dollar trade surplus with the occupied territories, a western diplomat said. The Bank of Israel said 90 per cent of Palestinian Imports transited through Israel.

Israel also relies on cheap Palestinian labour and for years slowed down Investments in Palestinian companies.

Only in the past two years has the military administration tried to promote the creation of Palestinian concerns by loosening controls, but the gap to fill is huge.

Palestinian industry is in its stuttering Infancy and only five per cent of the ventures have more than 20 employees, while two-thirds are Just workshops with fewer than four people.

Palestinian industry makes up only eight per cent of the economy, three times less than a country like Muritfus, the World Bank concluded.

No Jobs at home forces some 100,000 Palestinians to commute dally to Israel proper In search of legal or Illegal employment with their salaries representing 25 per cent of the occupied territories' gross national product. ‘

" High expectations derived • from-exposure to Israeli living standards is clearly a major Impediment to achieving peace and stability in the region", the World Bank report said.

The per capita income In Israel is eight times higher (11,000 dollar ) than in the occupied territories (1.350 dollar). Only nine per cent of Pales-

tinian homes have a telephone against 93 per cent In Israel.

The Palestinians hope the two billion dollar in aid pledged by the international community in October will help restore some of the balance in their favour.

The funds are to establish a Palestinian infrastructure and businesses and gradually lessen dependence on Israel once the Israell-PLO limited self-rule accord, signed September 13 In Washington Is implemented.

Palestinian economist Samir Abdallah wants to establish ties with Jordan to counter-balance links with Israel.

"Israel has no intention of replacing political colonialism with an economic colonialism.” Gaon insisted.

But Palestinian economists are skeptical since they fear the Israelis will become the major beneficiaries of the autonomy deal, by capitalizing on expanded exports to the Arab countries.