Since the beginning of the second intifada, Israel has imposed harsh restrictions on freedom of movement to and from the Gaza Strip. As part of this policy, Israel has almost completely severed the Gaza Strip from the West Bank, causing Palestinian movement between the two areas to fall drastically. Entry of residents of the Gaza Strip to Israel for family visits or to enable spouses to live together is forbidden, and family visits to Gaza by Arab citizens and residents of Israel have been reduced to a minimum. Israel has made it difficult for Gaza residents to go abroad, and many have been denied exit altogether.

Import and export of goods is limited, and frequently stopped completely. In addition, only a small number of Gazans have been allowed to work in Israel, and tens of thousands of Gazans have lost their source of income. The restrictions on movement of goods and workers have caused a deep recession in the Strip, impaired Gazans' ability to work, and brought about a sharp decrease in the standard of living. The poverty rate has risen by more than 40 percent.

In September 2005, Israel completed the "Gaza disengagement plan," which included dismantlement of the settlements in the Gaza Strip, evacuation of the settlers to Israel, and withdrawal of the army from the Strip. After the plan was completed, Israel issued an order declaring the end of the military government in the Gaza Strip and claimed it was no longer responsible for the safety and well-being of the residents there.  In doing so, Israel ignored the harsh reality in the Gaza Strip following its prolonged occupation, the closure it had imposed on the area for more than a decade, and the dependence of the Palestinian economy on the Israeli labor market and trade with Israel.