L. Aburaida - PhD student at Department of Geography University of Minho, Portugal

With the advent of the Palestinian Authority in 1994,many changes had been made to achieve its missions, one of them was started a new stage for the Palestinian economy, this stage opened new horizons for the Palestinian economy, but on the other hand, it brought out many of challenges and obstacles that still constitute obstacles to economic development on the differentaspects and different levels of the society. From here, the main challenge facing decision-makersand the private sector, is how to formulation of a development strategy? And trying as much as possible to minimize the negative effects of obstacles. This paper aims to investigate the Israeli policies on the Palestinian economy, by focusing on the impact of Israeli settlements industries, and what are the challenges this reality posed on the Palestinian economy and how to dissolved it. This paper relies on the historical approach to determine the evolution of Israeli settlements in the West Bank , and the analytical approach for the analysis of local statistics that is provided bythe Palestinian central statistics and research centers. As well as, several sources on related subject. The results showed the manifestations of the destruction of the Palestinian economy due to the confiscation of land and the depletion of water resources and the establishment of factories in theIsraeli settlements in the West Bank through the establishment of industries similar to thePalestinian Industries and dump this products in the Palestinian market at lower prices to be Competitive with Palestinian industrial products, in addition to attracting professional and well skilled labor, and tempted higher wage which led to labor migration from Palestinian factories to factories settlements. and review efforts at domestic international level, and what are positive steps to alleviate this impact.