In its report to the September 22, 2008meeting of the Ad Hoc Liaison Committee (AHLC), the WorldBank noted that the Palestinian Authority (PA), Israel, andthe international donor community made some progress on thethree parallel conditions for Palestinian economic revival,albeit to different degrees. The report notes the dramaticimpact of Israel s recent three-week offensive in Gaza andanalyzes the variety of recovery and reconstruction schemesbeing explored by the donor community. We find that thesehave not yet led to any significant impact on the ground dueto the continued closure imposed on Gaza. The devastation inGaza, coupled with a fluid political environment in both thePA and Israel, has made it necessary for this report torevisit the fundamentals of donor support to the PA in viewof the long-term goal of establishing an economically viablePalestinian state independent of external aid. Examinationthrough this lens reveals a fundamentally flawed picture.