Every morning Palestinian businessman Zahi Khoury studies a map of Israel's West Bank barrier on his wall, despairing at how his Coca Cola products will reach customers. "It's a catastrophe," he says.
On the other side of the barrier, some Israeli businessmen the barrier is destroying trade they had preserved with Palestinians despite the bloodshed since an uprising against Israeli rule was launched in 2000.
Israeli officials say the barrier is bound to benefit its economy by keeping out suicide bombers.
The cycle of attack and revenge arising from the Palestinian uprising has led to the worst ever downturn in both neighbouring economies.
Israel's GDP declined in 2001 and 2002, depressed by both the conflict and a world slump. Growth resumed in 2003 as export markets revived and violence abated somewhat, although Israel has not fully emerged from the worst recession in its history.
The Palestinian economy, a tenth the size of Israel's, in the occupied West Bank and Gaza where the revolt began has been paralysed by its dependence on Israeli markets and a military clampdown on the movement of people and their goods.
The barrier, a strip of razor-fencing and walls, runs near the border with Israel but often veers into the West Bank to take in Jewish settlements. As a result, Palestinians see a bid to annex land they claim for a state - and economic disaster.
They say it will ruin those who have managed to survive on business in Israel - whether larger entrepreneurs like Khoury or countless small traders and illegal migrant workers.
Some West Bank towns, merchants and farmers have been cut off not just from Israel but from internal markets after being trapped inside loops in the projected 730 km (450-mile) barrier, about 180 km (110 miles) of which has been built.
"I don't know how I'm going to do business any more," Khoury, chairman of the Palestinian branch of the US soft-drink giant Coca Cola, said in his West Bank office.
"My staff always asks me, how can we plan ahead with the wall? Coca Cola distribution has already dropped 40 percent."
Palestinian officials have no figures on how much the barrier and various Israeli security steps have harmed overall trade, reflecting their lack of access to affected areas.
Even before the barrier, Palestinian unemployment more than doubled from the pre-conflict period to over 60 percent. Sixty percent of the 3.5 million population now lives on less than $2 a day. Samir Sunghuly, owner of a clothing factory in the city of Tulkarm abutting the barrier in the northern West Bank, said his business had sunk deeply into the red.
"The checkpoints and the wall have hurt my business a lot. Profit is out of the question now. I am constantly making losses and we are almost bankrupt," he told Reuters.
Mu'ayad Tibi is a businessman in Taybeh, an Israeli Arab town on the other side of the barrier from Tulkarm. His agri-business has been crippled by the barrier.
"I used to employ Palestinian workers from Tulkarm. When the wall was built they couldn't cross. I replaced them with Israeli Arabs, who demanded over twice the Palestinians' wage," Tibi related. "I couldn't afford them, I incurred great losses and had to sell off the land." Poverty and income gaps have dramatically worsened in Israel since 2000. Unemployment is near 11 percent. Spending on defence including the costly barrier has climbed while austerity cuts have been imposed in the education, welfare and health sectors.
While Palestinian society has broken down because of the conflict, beyond the negative economic headlines many Israelis continue to lead relatively affluent lives disrupted only by periodic suicide bombings and security alerts.
Israeli Finance Minister Benjamin Netanyahu said in February that the barrier was helping fuel the new rebound in Israel's economy by foiling the infiltration of suicide bombers.
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