COMMENTATOR (COMM): Previously on Life...

SASKIA SASSEN: An "urban war zone" for me is a part of the city that has been neglected in terms of investments, basic public services - very elementary things. There are more cases of children suffering and there is a constant threat also from other forces in society.

PETER MARCUSE: Housing ought to be treated as something that people have as a right.

COMM: The Gaza Strip, sandwiched between Israel and the Mediterranean sea, is just 45 kilometres long and six wide. It's one of the most densely populated areas of the world. Over a million Palestinians live here, most are refugees. Their parents or grandparents were forced to abandon their homes in 1948 when Israel moved in. Throughout the year 2000 the Camp David final peace talks between the Palestinians and Israelis limped along. In August they finally broke down. Tensions rose and in September a provocative visit to the Al Asqa Mosque sparked the second Palestinian Intifada, or uprising. Gaza's always been hemmed in, surrounded, by Israel. Now, under the iron grip of the Israeli Defence Force it's become a virtual prison. No one is allowed in or out without their permission. Gaza is under siege.

RAJI SOURANI, Director, Palestinian Centre for Human Rights, Gaza: Europe victimised the Jews, they were in the Auschwitz. Of course that's terrible but at the same time they decided to fled they came to this safe place called Palestine. But the fact they came to Palestine they victimised another people.

ODED ERAN, Israeli chief negotiator to Camp David 2000: The Palestinians claim there are four million Palestinian refugees. If Israel were to absorb only a part of it this would obviously bring an end to the political entity called Israel and therefore this amounts to committing suicide.

COMM: Erez checkpoint - the only route out of Gaza to Israel. A year ago 30,000 Palestinians would file through this tunnel early every morning to work in Israeli industries, their income a lifeline for these of the refugees. But since the start of the Intifada, Israel's shut its gates to all these workers. Shati camp in the north of Gaza houses more than 74,000 refugees. It's one of nine refugee camps in the Gaza Strip. Reyidh Taramsi was born here. He's one of the 25,000 workers who've lost their jobs in Israel because of the Israeli clampdown, now he can't support his family.

REYIDH TARAMSI (TRANSLATION): Since September last year we haven't been able to get to work - you could say everybody is in the same situation, people are struggling from these things such as not being able to work, or get a job. Do you understand me? Life without work has no taste.

COMM: Reyidh and his wife Sabah live in this two-roomed house with their seven children. Before, the family could just about survive on Reyidh's weekly pay packet from Israel. Now life is becoming daily, more and more difficult. They're like thousands of refugee families in Gaza.

REYIDH TARAMSI (TRANSLATION): First of all, we haven't paid the electricity bill because we haven't any money to pay it. We can't pay for water, health insurance also we can't pay the telephone bill we can't pay anything. I mean, the situation is disastrous - not just me, for everyone. Really, I've borrowed over three thousand US dollars and that's not counting the bills. This means that in two years I can't repay this loan. If this goes on no one will be able to repay one shekel.

MAN (TRANSLATION): This is Reyidh's younger brother - he works in the market. He is supporting his and Reyidh's family. He gives Reyidh's children pocket money and brings things from the market and buys them the sack of flour - what more can I say?

COMM: Reyidh's son-in-law, Ramadan, used to work as a plasterer in Gaza but now he's lost his job too because of Israel's strangle hold over the local economy.

SABAH (TRANSLATION): What have you been doing?

RAMADAN (TRANSLATION): I've been out looking for work from early morning, my legs ache but I haven't found a job - what can I do?

SABAH (TRANSLATION); What can you do? You're like everybody else - it isn't just you.

RAMADAN (TRANSLATION): Well everybody else is going to explode if we have to sit at home like old women.

REYIDH TARAMSI (TRANSLATION): Our economy is linked to Israel's behaviour: if Israel prevents the 50,000 workers going to work in Israel that means that 100,000 people working in Gaza will be unemployed.

COMM: UNRWA is the United Nations Relief Agency for Palestinian Refugees. With its resources under pressure, it's now using emergency funds from appeal donations to help Gaza's unemployed Palestinians. It's set up a temporary, rotating job scheme employing 3,000 manual workers - but this is just a fraction of those without jobs. Every day workers visit the office to see if their names have come up.

REYIDH TARAMSI (TRANSLATION): Hello, we've applied two or three times and our names still haven't come up. Shall we apply again?

MAN BEHIND GRILL (TRANSLATION): Maybe they'll come up.

REYIDH TARAMSI (TRANSLATION): Shall we put in a new application?

MAN BEHIND GRILL: You don't need to re-apply.

REYIDH TARAMSI (TRANSLATION): I haven't got money to feed my kids! I swear the stress is shortening my life - this has never happened to me before!

LEONARDO TARNAWIECKI, UNRWA field administration officer, Gaza: We receive daily hundreds of applications - we have a data base with more than 25,000 applications that we've already put in the database, plus we have maybe another ten thousand waiting to be inputted.

MAN WITH GLASSES (TRANSLATION): What can we do? This is our situation, all the world is watching and turning a blind eye - never mind, let them stay in their seats. 40,000 people have applied here.

2ND MAN (TRANSLATION): There's no money - there's no work.

WOMAN (TRANSLATION): Here we are running after something to eat and we can't get it - there's no money, and where can we get it? And the kids want to eat. We can suffer it but our little kids can't.

COMM: Israel invaded and occupied the Gaza Strip in 1967. But over the last seven years, since the signing of the Oslo Agreement, the Palestinians have been allowed a degree of self-rule and economic independence under the Palestinian Authority - although Israel always retained overall security control. This fragile alliance has now broken down and Palestinian refugees are now suffering the consequences.

COMM: For Sabah's mother, Thoraya, the trouble started when the Israeli's came and took her land 53 years ago.

SABAH (TRANSLATION): What they are doing is frustrating us - it's making us tense, we are exhausted! We're worrying day and night: when will there be a good solution and when will the roads be open for us? As long as there is a blockade like this even the young people who don't think about joining the protests will be encouraged to go. This pressure results in bad things and more pressure will cause an explosion.

THORAYA TARAMSI (TRANSLATION): Shame on them to take our land and shoot us! With tanks! We have no tanks, no guns we have no weapons - just pieces of stone. What's a stone?

COMM: Two sticking points in the peace negotiations were the refugees' right of return and the control of Jerusalem. This led to protests and clashes. Almost daily, children go to throw stones at the checkpoints - many get shot. At Al Awda Hospital, near the main border checkpoint, 15 boys have been admitted with gunshot wounds today.

RIAD: Our young man here is well known to us - this is his second time to get injured during this Intifada. He's 13 years old. He says he goes to checkpoint - to Erez checkpoint so that we can protect our land. She says - she just thanking Allah for his injuries because it's not serious. It's really, you know, dangerous to go up there but we have to go. We cannot just let these young kids die. Er, he went there to throw stones and they shot him. Er, somebody told him that his younger brother was at the check-point throwing stones - says his younger brother had run away from him and as he was hiding he received a bullet - I'd say two bullets, actually. She tries to tell them not to go. She tries to prevent them not to go but they go.

SABAH (TRANSLATION): I'm afraid someone will convince my children to go to Al Montar or Nazareem junction or any point where the Israeli Army is present and they get hit and killed. That terrifies me.

COMM: Mahmoud Abu Shahadeh from Jabalya refugee camp was killed at Erez checkpoint. He's one of 135 children that have been killed by Israeli soldiers in the last nine months in Gaza in the West Bank. Over four hundred others have been disabled - half were under 17.

MAN WITH GREEN SHIRT: My friend.

BOY: He worked with him in the supermarket. He is, he is for 15 years old - killed him. In his head.

COMM: There are few Israeli commentators who publicly condemn the military's response to the Palestinian children's protests, but journalist Amira Hass does.

AMIRA HASS, Ha'aretz correspondent: It has become completely unquestionable that the army has a right to shoot children who throw stones, and those stones don't even tickle the army beton blocks which make these military posts.

COMM: Despite repeated requests, the Israeli Defence Force was unable to offer a spokesperson to provide an official response to these issues.

DIRECTOR: He's lucky not to understand too much, isn't he?

SABAH (TRANSLATION) Yes, it's better he doesn't know what's going on. So he isn't afraid. Isn't that right Akram, you don't worry, do you? Good boy.

DIRECTOR: He'll be old soon enough won't he?

SABAH (TRANSLATION): Of course, from now on as he grows up he'll see everything with his own eyes. Things happening for real in front of kids - like the missiles and the bombings last night. Don't you think these kids are aware of how their live is going?

COMM: Air raids on Palestinian cities are becoming more frequent. Last night, only two kilometres from Sabah's house, Israeli missiles struck the Palestinian Authority's Force 17 base in Gaza City. The reason? The Israeli Defence Force blamed Force 17 for recent attacks on Israeli settlements.

KHALDOON (TRANSLATION): This is only one part of the building. Can you see these two shells? One from this side and one from the other side.

COMM: This time most of the men escaped when they heard helicopters approaching.

FAYED: Guided missile surface...

KHALDOON (TRANSLATION): Of course they are made by the United States of America.

SABAH (TRANSLATION): That's why they will be of the opinion that the Israelis are the ones who always attack us, deprive us of our rights and take away all the sweet things in our life. Nothing sweet is left.

RAJI SOURANI, Palestinian Centre for Human Rights, Gaza: I won't imagine any sort of peace can be concluded except Israel as a state, as a people, as collective conscience said, "Fine, we committed something wrong. We victimised Palestinians. We made them refugees. These people were suffering for the last 53 years and it's about time to find a solution."

ODED ERAN: While we feel compassion for all these refugees we think that there should be a solution which will give satisfaction to the Palestinian refugees but at the same time will maintain the survival of the State of Israel.

AMIRA HASS: Personally, as an Israeli Jew - and I see myself as a child of refugees, refugees from the Holocaust - I don't understand why I have more rights here than Palestinians.

COMM: The refugees' right of return is set out in the United Nations, General Assembly Resolution 194, passed in 1948. It states that 'Refugees wishing to return to their homes and live at peace with their neighbours should be permitted to do so at the earliest practicable date...' The refugees' right of return is further reinforced by international treaties: the Universal Declaration of Human Rights, the 4th Geneva Convention and the International Covenant on Civil and Political Rights.

RAJI SOURANI: They do have the right either to return compensated or to choose another place, but right of return is fully guaranteed according to international law, according to UN General Assembly Resolution 194.

HAIDER ABDEL SHAFI, Palestinian chief negotiator to Madrid, 1991: When Israel applied to be a member of the UN it was accepted on the basis that it will respect Resolution 194. But it did not.

COMM: To add to the family's other problems Akram is sick. He needs surgery to correct a congenital gut disorder - a cost that the family will have to contribute to with money they don't have. It's an all too common problem among refugee children here, as Dr Mustafa Khalil explains.

DR MUSTAFA KHALIL: There is a specific health problem here regarding to the situation as anaemia, as growth and development problem - as many things. In Gaza Strip, in refugee camps due to the economy of the family - especially the economy of the family, the income and here now there is a problem because there is er no work for the head of the family and big number of family. It is here a big problem you know. We must refer him to Shifa hospital, to paediatric surgery department and then they decide what they can do for the child.

COMM: Shifa hospital is in Rafah at the southern end of Gaza but the road that links the north and south is controlled by Israeli forces, making the trip difficult and sometimes dangerous.

COMM: There are now some 20 Israeli settlements (the precise number is disputed by either side) dotted along the Gaza Strip and shown here in red. They're all heavily guarded by the Israeli Defence Force and occupy nearly half this small sliver of land. They have their own access roads to Israel but these also cross the main arteries that link the Palestinian cities. The army closes the main roads whenever settler vehicles are passing. They also frequently close them for no apparent reason, cutting Gaza into three strips.

AMIRA HASS: What was taking place is a process of bantustan-isation: that Israel managed to - and with the tacit consent of the Palestinian Authority - managed to create a geographical and demographical picture and scenario of very distinct pieces of land where Palestinians live and enjoy some self-rule within. But all are scattered and disconnected from each other and drowned in an ocean of Israeli control.

UNRWA TRANSLATOR: The settlers are trying to stage a sit-in at the settlement road and the IDF is guarding them and blocking the road.

MAN WITH CAP: We stuck here everyday because the Jewish - the Jewish, they close the way off every time.

DIRECTOR: For what reason?

MAN WITH CAP: OK, they have no reason - we don't know.

MAN WITH CAP: We're going to our work.

DIRECTOR: It's bad?

MAN WITH GREY HAIR: Yes. Very bad. Of course.

SABAH (TRANSLATION): We're in a prison under intensive Israeli occupation. If we want to go country - not just Israel - for work, all the borders are shut in our face.

COMM: Israel's control isn't just limited to the land. Gaza's major natural asset is its 45 kilometre Mediterranean coastline which once provided a basic living for many Palestinian families, especially refugees. But now Israeli forces prevent Palestinian fishing boats from going any distance out to sea.

SUFIAN BAKER, Fisherman (TRANSLATION): The fishing is very poor - we don't even get enough to feed ourselves or pay for the fuel. All night just seven boxes and not even good fish. We haven't got enough space to fish. The area is under siege. We can't get to the good fishing grounds. We're only allowed to go one and a half kilometres out to sea which is nothing and there's a thousand fishermen - how can there be any fish left? The Israel patrol boats - the military boats - come towards us and force us back. Sometimes, if we don't hear them or the boat takes time and space to turn, if we're not quick enough they come at us and order two men to jump in the sea and then they take them to Erez and then to prison.

MAN WITH FISH SELLERS: It's the British government who make for us the first problem: they give the Jewish to Palestine. There is no peace. When we go back to our land, this is the real peace.

GRANDMOTHER (TRANSLATION): It's our fault that we left our homeland we should have stayed even if they had killed us there. We've caused our younger generations to inherit a great problem because we left. But we had to, we were kicked out.

SABAH (TRANSLATION): The most important thing is we want a peaceful solution - why? To allow us to go back to our land and there will be peace between us - this is the most important thing.

ODED ERAN: The solution in which Israel is willing to participate cannot be in the absorption of any number of refugees in Israel itself. You change the ratio - you change the balance and you bring about the end of this predominately Jewish state. That is something that I cannot accept. When my parents came in 1933 from Europe - not because they were persecuted by Hitler, Hitler just rose to power - they were not religious they were not orthodox, they were Jews but they weren't orthodox, but they wanted to live in a predominantly Jewish State and so do I.

RAJI SOURANI, Director, Palestinian Centre for Human Rights, Gaza: This is racism! I mean, when you build a state conditioned on religion. You know, the fact you are a Jew you would be on the airport according to the right of return, granted nationality, citizenship and do enjoy first class treatment just by the fact you are a Jew. While these millions of Palestinian people, who live their lives for generations and generations, don't enjoy that basic right.

SABAH (TRANSLATION): We want a compromise and a peaceful solution and to implement this peace treaty in the right way. We don't want to this trouble every day: start the Intifada, stop the Intifada, and stop it again - this is not a solution. We want to live as well, we want to plan our lives. Should our kids stay like this forever? We want to be able to bring up our kids up and live in peace.

END