In September 2005, Israel completed the "disengagement plan," which included the dismantling of all the Israeli settlements in the Gaza Strip, the evacuation of their residents to Israeli territory, and the withdrawal of all Israeli army forces from the area. After the plan was completed, Israel issued an order declaring the end of the military government in the Gaza Strip. The changes following the disengagement resulted in some improvement in the ability of Palestinians in the Gaza Strip to run their lives. Most importantly, they are now able to move about freely in most of the territory. However, Israel continues to hold decisive control over important elements of Palestinian life in the Gaza Strip, as follows:
- Crossing of people: Israel continues to maintain complete control of its border crossings with the Gaza Strip, and the air and sea space of the Gaza Strip. Until June 2006, it supervised movement of Palestinians via the Rafah Crossing on the Egyptian border. In June 2006, following the abduction of the soldier Gilad Shalit, the Crossing Agreement ceased to exist, and the crossing remains closed most of the time. In June 2007, when Hamas assumed power in the Gaza Strip, Israel tightened its control of the crossings along its border and currently prevents persons from entering and exiting the area except in isolated cases it deems humanitarian. Egypt only enables persons to cross through Rafah Crossing in
- Crossing of goods: Israel continues to control the movement of goods into and out of the Gaza Strip. The three crossing points designated for this purpose - Karni, Sufa, and Kerem Shalom - are under Israel's sole control. Rafah Crossing has a terminal for the movement of goods, but under the Crossing Agreement, signed in November 2005 between Israel and the Palestinian Authority, it may be used for export alone. In any event, the agreement has not been implemented since the abduction of the soldier Gilad Shalit, on 25 June 2006. Israel's frequent closing of the commercial crossings and the imposition and tightening of the siege, in June 2007 has economically paralyzed the Strip - 90 percent of the factories and thousands of businesses have closed down and tens of thousands of persons have lost their jobs. Closing of the crossings has led to a sharp drop in the availability of basic items, including food and medicines. The tunnel economy that has developed as a result of the siege enables the entry of goods that Israel prohibits, but is not a suitable substitute for economic activity in the Gaza Strip.
- Air space and territorial waters: Israel continues to maintain complete control over the air space and territorial waters of the Gaza Strip. Control of the air space enables Israel, among other things, to effectively and easily monitor actions on the ground such as interfering in aerial broadcasts, among them radio and television broadcasts. Israel has used its control of the waters off Gaza's coast to restrict fishing to only three nautical miles from shore. Israel does not permit the Palestinians to build a seaport or an airport in the Gaza Strip, impairing freedom of movement to and from the area and the Palestinians' ability to conduct foreign trade.
"Foreign" residents, except those in a few categories, are only allowed to enter the Gaza Strip via the Kerem Shalom and Erez crossings, which are under Israel 's sole control. Control over the entry of "foreigners" enables Israel to continue to control family unification between Gazans and their spouses who are foreign residents. Also, Israeli control plays a decisive role in social and economic systems, which rely on the presence of experts from abroad.
- Population registry: Israel continues to control the joint Gaza Strip-West Bank population registry. Formal authority for administering the population registry was transferred to the Palestinian Authority under the second Oslo Agreement of 1995, but Israel continued to hold certain veto powers, among them the right to determine whether Palestinian couples from the West Bank and the Gaza Strip and their children over age 16 may receive Palestinian residency status. Under the agreement, the Palestinian side must inform Israel of changes it makes in the population registry, including each resident's place of residence. This situation did not change after implementation of the disengagement plan. Since 2000, Israel stopped updating its copy of the population registry and has not recognized changes made by the Palestinian Authority. At the same time, Israel has gradually made it harder for Palestinians listed as residents of Gaza in their identity cards to stay in the West Bank. This is true also for persons from Gaza who have lived in the West Bank for many years and established families there. As part of this policy, since 2007, Israel has demanded that these persons have a special permit, which is provided only if stringent conditions are met. Persons who do not have the permit are deemed to be staying illegally and are expelled to the Gaza Strip.
- The tax system: Israel continues to control the tax system of the Gaza Strip. Under the Paris Agreement (1994) between Israel and the PLO, Israel is responsible for setting the VAT and customs rates on goods intended for consumption in the Gaza Strip, collecting these taxes for the Palestinian Authority, and transferring the tax monies to the Palestinian Authority each month. These powers enable Israel to punish the Palestinian Authority by stopping the transfer of the tax revenues to it. Israel also controls the granting of exemptions from customs and VAT to non-profit humanitarian-aid organizations, which engage in vital humanitarian activity, for products and equipment donated to them from abroad. This power is extremely significant: if not granted the exemption, an organization would have to pay the taxes that the importer would have to pay when the goods enter the Gaza Strip at one of the crossing points controlled by Israel. With the imposition of the siege on Gaza, in June 2007, Israel blocked the customs code for the Strip in its government computer system. As a result, goods subject to customs are prevented from entering the Strip directly. Israel allows in only a limited number of imports, those it defines as humanitarian and thus exempt from customs duty.