A Palestinian child stands in front of a tent on a rainy day in Gaza City, November 25, 2025. REUTERS/Mahmoud Issa

GENEVA (Reuters) -The two-year Gaza war and economic restrictions have triggered an unprecedented collapse in the Palestinian economy, wiping out decades of growth, a United Nations report said on Tuesday.

"Extensive damage to infrastructure, productive assets and public services has reversed decades of socioeconomic progress in the Occupied Palestinian Territory," according to the report by the United Nations trade and development agency (UNCTAD).

The Palestinian GDP per capita by the end of last year returned to that of 2003, erasing 22 years of development progress, it added. The resulting economic crisis is among the ten worst globally since 1960, the report said.

The scale of the damage in Gaza after the two-year war between Israel and Hamas means the enclave will be reliant on extensive international support and recovery could still take decades, the report said.

The West Bank is also suffering its most severe downturn on record, driven by movement and access restrictions and the loss of opportunities across all sectors of the economy, the U.N. report said.

(Reporting by Emma FargeEditing by Ludwig Burger)