Palestine loses 18% of its annual tax revenue and 3.6% of GDP due to the trade controls placed on it by Israel.
A study by the United Nations Conference on Trade and Development (Unctad) shows that the occupied territories lost at least $310m (£197m) in customs and sales tax in 2011. Unctad calculates that the lost revenue could be worth 10,000 additional Palestinian jobs.
The organisation urges a reformation of the Paris Protocol – the agreement that defines economic ties between the two countries, and which "causes instability and uncertainty for the Palestinian territory".
Israel places restrictions on the passage of goods in and out of Palestine and exerts "disproportionate influence" on the Palestinian government's ability to monetise trade. Its policy of freezing funds transferred is singled out for particular criticism.
The fact that Palestine is forced to trade in the dominant Israeli currency causes lost revenue, as does an inability to properly manage its own natural resources and territories.
"The study recommends that the Palestinian National Authority should be allowed full access to all data related to imports from or via Israel when the final destination of consumption is the Occupied Palestinian Territory, that existing time restrictions preventing the Palestinian National Authority from claiming due revenues be abolished, that Palestinian dependency on Israel be ended by removing barriers to trade with countries other than Israel and that the Palestinian National Authority be provided with the financial and human resources needed to strengthen its customs administration capacity," it reads.
Unctad also suggested that the figures mentioned are conservative and are likely to underestimate the true scale of the issue. It called for further research to be conducted into the area.