Palestinians have seen their employment reduced by two-thirds in the Gaza Strip – equivalent to 192,000 jobs – since the outbreak of the war, the ILO and Palestinian Central Bureau of Statistics (PCBS) said on Wednesday.

The spillover effect on the economy of the occupied West Bank was also significant, with a one-third reduction in employment – equivalent to 276,000 jobs.

The devastating loss in the job market in Gaza exacerbates the already dire conditions which prevailed in the blockaded territory even before the current conflict, “rendering it essentially uninhabitable”, the report added.

Palestinians in Gaza have long grappled with persistently high rates of poverty, vulnerability and one of the highest unemployment rates in the world, it noted.

“The crisis has caused a huge distortion in the Palestinian economic structure,” said PCBS president Ola Awad.

“The unemployment rate in the Gaza Strip now exceeds three-quarters of the labour force, and around a third of the West Bank’s labour force is unemployed, reaching the highest level of unemployment in decades,” Awad added

This “humanitarian catastrophe of epic proportions” that has wreaked havoc on the labour market will result in life-long hardship for the population and a complete dependency on international aid, the organisations announced.

Peter Rademaker, ILO’s deputy regional director for Arab states, told Al Jazeera from Geneva that Palestinians in Gaza “will be in poverty for many months and years to come” because of Israel’s war on the enclave.

“The labour market was already very depressed in the occupied West Bank and Gaza even before the war,” he said.

“[As the war goes on] many people in Gaza and also West Bank will have no income, no wages. Nobody’s going to pay them any money and they will increasingly have to rely on international assistance,” added the deputy director.

This will leave the people of Palestine in a state of dependency and in competition for a share of global distributions of aid money for many years to come.

“Unfortunately, the authorities have no public financing to provide social assistance, so it’s going to have to come from the outside,” he explained.

“As we all know, many crises are raging globally, and the chances of Palestine receiving the international aid it needs are not necessarily very high.”

Nearly 40,000 buildings, or about 18 percent of all pre-conflict structures have been damaged or destroyed in the Gaza Strip since the conflict started, a UN assessment showed last week.

At least 8,000 children and 6,200 women are among those killed, Gaza’s Government Media Office reproted on Wednesday.

The grim milestone was passed as the United Nations Security Council postponed a key vote on a bid to boost humanitarian aid for Gaza for the third time to avoid a veto from the United States, which traditionally shields its ally Israel from UN action.

Since a seven-day truce collapsed on December 1, the war has entered a more intensive phase with ground combat previously confined to the northern half of the territory now spread across its length.

When asked about the ever-growing casualty count, US Secretary of State Antony Blinken said it is “clear that the conflict will move and needs to move to a lower intensity phase”.

“We expect to see and want to see a shift to more targeted [Israeli] operations with a smaller number of forces that’s really focused in on dealing with the leadership of Hamas, the tunnel network and a few other critical things,” he stated, adding, “And as that happens, I think you’ll see as well the harm done to civilians also decrease significantly.”

The UN Security Council vote on a bid to boost aid to the Gaza Strip and ask the UN to monitor humanitarian aid deliveries there has been delayed at the request of the US, diplomats said.

According to the United Arab Emirates envoy to the UN, Lana Nusseibeh, the vote will take place on Thursday.

“Everyone wants to see a resolution that has impact and is implementable on the ground, and there are some discussions going on on how to make that possible,” Nusseibeh, whose country drafted the resolution, told reporters in New York.

The text aims to dilute Israel’s control over all humanitarian aid deliveries to the 2.3 million people of Gaza. The initial text has been reportedly modified to soften calls to end the fighting in Gaza to avoid yet another veto from the US.

“We want to make sure that the resolution … doesn’t do anything that could actually hurt the delivery of humanitarian assistance, make it more complicated. That’s what we’re focused on,” Blinken told reporters on Wednesday.

“I hope we can get to a good place.”

Currently, Israel monitors the limited humanitarian aid and fuel deliveries to Gaza via the Rafah crossing from Egypt and the Israel-controlled Karem Abu Salem crossing, known as Kerem Shalom in Hebrew.

On Wednesday, the first aid convoy entered Gaza directly from Jordan with 750 metric tonnes of food. The World Food Programme announced half of Gaza’s population is starving and only 10 percent of the food required has entered Gaza since the war began on October 7.

The US and Israel oppose a ceasefire, believing it would benefit only Hamas. Washington instead supports pauses in fighting to protect civilians and allow the release of captives taken by Hamas.

Separately on Wednesday, Hamas leader Ismail Haniyeh paid his first visit to Egypt for more than a month in a rare personal intervention in diplomacy amid hopes that the Palestinian group and Israel could agree terms for another truce.

Haniyeh arrived in the Egyptian capital to meet with Cairo’s spy chief and other Egyptian officials who are acting as key mediators. Meanwhile, Israeli officials have indicated in talks with US and Qatari representatives that they could be open to a truce.

The Hamas leader last travelled to Egypt in early November before the announcement of the only pause in the fighting so far, a weeklong truce that saw the release of about 110 of 240 captives taken by Hamas into Gaza on October 7.

The Palestinian Islamic Jihad, a smaller armed group that is also holding captives in Gaza, announced its leader would also visit Egypt in the coming days to discuss a possible end to the war.

A source briefed on the negotiations stated envoys were discussing which of the captives still held by Palestinian groups could be freed in a new truce and what prisoners Israel might release in return, the Reuters news agency reported.

But there remains a huge gulf between the two sides’ publicly stated positions on any halt to the fighting. Hamas rejects any further temporary pause and says it will discuss only a permanent ceasefire. Israel has ruled that out and says it will agree only limited humanitarian pauses until Hamas is defeated.

Israeli Prime Minister Benjamin Netanyahu has ruled out the prospect of any ceasefire in the Gaza Strip.

In a statement on Wednesday, Netanyahu stated Israel “won’t stop fighting until we’ve achieved all the objectives we’ve set ourselves”.

He identified one of those goals as “elimination” of the Gaza-based resistance movement of Hamas, which rules the coastal sliver and has been defending the territory in the face of the Israeli onslaught.

The Israeli premier also alleged that the regime would follow through with the military campaign until “the release of our hostages”.

US President Joe Biden stated he did not expect an Israel-Hamas deal for the release of captives held in Gaza to be struck soon.

“We’re pushing,” Biden told reporters during a trip to Milwaukee, Wisconsin.

“Recently displaced children in the southern Gaza Strip are accessing only 1.5 to 2 litres of water each day,” the statement said.

It added that 15 liters are the minimum standard per day for drinking, washing, and cooking, while three liters are the minimum for survival alone.

UNICEF reported water and sanitation services in Gaza are “at the point of collapse,” which could have severe repercussions on children.

“The impact of this on children is particularly dramatic because children are also more susceptible to dehydration, diarrhea, disease and malnutrition, all of which can compound to present a threat to their survival,” UNICEF said.

“Concerns of waterborne diseases such as cholera and chronic diarrhea are particularly heightened given the lack of safe water, especially following this week’s rains and flooding,” added the statement.

Last week, the World Health Organization reported it had recorded about 165,000 cases of diarrhea amongst children under the age of five, which it described as “much more” than normal.

“Without safe water, many more children will die from deprivation and disease in the coming days” UNICEF Executive Director Catherine Russell stated.

Israel has previously said it is “facilitating various humanitarian aid initiatives” in Gaza, including “the supply of water directly from Israel”.

A United Nations agency also said Tuesday half of Gaza’s population is starving and residents are often going entire days without eating under Israel’s bombardment of the enclave of more than 2 million people.

“The amount of aid crossing into Gaza does not meet a fraction of the needs,” the World Food Programme (WFP) said in a post on X, formerly Twitter.

Just 10% of the food required for Gaza has entered the strip over the past 70 days, Corinne Fleischer, WFP Regional Director for the Middle East, North Africa and Eastern Europe, stated in an interview with Canada’s CBC News on Sunday.

Two weeks ago, WFP warned that 97% of Palestinian households in the north of the strip and 83% in the south reported inadequate food consumption.

Since then, tens of thousands of displaced Palestinians have arrived in Gaza’s southernmost governorate of Rafah in search of safety, according to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA)

“Thousands of people [in Rafah] line up before aid distribution centres in need of food, water, shelter, and protection, amid the absence of latrines and adequate water and sanitation facilities in informal displacement sites and makeshift shelters,” OCHA added.

Jagan Chapagain, secretary general and CEO of the International Federation of Red Cross and Red Crescent Societies, also warned the situation in Gaza is “desperate”.

“Aid delivery is becoming increasingly more difficult due to the ongoing shelling and lack of fuel and supplies.”