In response to an economic crisis gripping the West Bank, Israel has increased the number of permits for Palestinians to work in Israel. This has drawn large crowds of desperate men to the gray edifice each morning in chaotic scenes of long lines, frustrated faces and heated arguments as they try to secure a coveted permit.
At a time of double-digit unemployment in the West Bank, Palestinian workers, particularly people working in manual jobs like furniture moving, gardening and maintenance work, have few other options.
"It's a dream to get a permit and work in Israel," said Kayed Ashkar, 45, who is unemployed and a frequent visitor to the Israeli Civil Administration office. "I used to work there. I used to earn enough money for my family," said the former waiter, whose wife's modest salary in a local wedding hall supports their five children.
Israeli authorities have granted an additional 10,000 permits this year to work in Israel, raising the total number to 40,000. It's still well below the peak level of 200,000 in the 1990s, but the most since a violent Palestinian uprising erupted in late 2000. The uprising was characterized by suicide bombings and other attacks carried out by West Bank Palestinians, prompting Israel to revoke most permits.
An additional 25,000 Palestinians work in Israeli settlements in the West Bank, underscoring their dependence on the Israeli economy. The Palestinians as a rule harshly oppose the existence of the settlements on land they claim for their state.
UN figures say unemployment in the West Bank is 17%, a figure that may well under-represent the severity of the crisis, given the large numbers of underemployed in the West Bank.
The tough times have fueled an angry mood among Palestinians. Last month, in a rare move, thousands demonstrated against Prime Minister Salam Fayyad, blaming the US-educated economist for their deepening impoverishment.
The Western-backed Palestinian Authority, the local autonomy government, has paid only partial salaries to its 114,000 civil servants in the West Bank, about 15% of the local work force, over the past few months because of a shortfall in its $4 billion budget.
The public sector is by far the biggest employer in the West Bank, forming the backbone of the Palestinian economy, so the government's inability to pay has rippled throughout the economy.
October's salaries haven't arrived yet, and the government has further angered Palestinians by announcing plans to fix the minimum wage at $345 a month, below the local poverty line. Also, taxes and prices for basic goods have risen.
The crisis has several causes. The Palestinian Authority is heavily dependent on foreign donors, and key backers, including the US and Arab countries, haven't delivered promised aid.
Adding to the challenger, Israel continues to control 60% of the West Bank, constraining Palestinian growth and development. Israeli security policies also limit Palestinians' ability to import and export. Israel has taken steps, such as removing military checkpoints, to ease movement in and out of the territory, but the World Bank and others say it must do more. On the Palestinian side, attempts by Fayyad to increase taxes have been met with fierce resistance.
In a report to donors last month, the World Bank appeals to them to urgently prop up the Palestinian government.
"But even with this financial support, sustainable economic growth cannot be achieved without a removal of the barriers preventing private sector development," it warned.
It's a far cry from Fayyad's grand vision, unveiled in 2009, that aimed to end Palestinian dependency on Israel and lay the foundation for independence.
Israelis, Palestinians remain bound together
Fayyad, a former International Monetary Fund official, promised new roads, schools, an airport and other development projects. The money would come from donors and increasing tax revenues.
The goal was to generate employment in the West Bank, the heartland of a future Palestinian state, ending the need for laborers to find work in Israel.
To stop Palestinians from inadvertently supporting Israel's Jewish settlement enterprise, his government banned the sale of items produced there. He also tried to halt Palestinian laborers working in Jewish settlements, especially construction jobs building new homes. Palestinians say the settlements are preventing them from building their state by cutting up the West Bank.
Despite Fayyad's best intentions, investors shied away, deterred by a deadlocked peace process, a global economic slowdown and regionwide turmoil. Alternative efforts by Palestinian leaders to unilaterally carve out independence through international recognition are making little progress.
Yet Israel has a strong interest in keeping Fayyad's government afloat. The Palestinian Authority's collapse would wreak chaos on Israel's doorstep and endanger key security cooperation that has helped maintain years of relative calm.
In a separate report to donors last month, Israeli officials boasted of a series of measures it was taking to bolster the Palestinian economy, including increasing work permits.
Israelis and Palestinians remain bound together, though their stated goals are separate states.
"There's no way for us to disconnect the Palestinian economy from Israel's, before it ends its occupation," said Palestinian Labor Minister Ahmed Majdalani.
On a recent day, some 200 Palestinians gathered outside the military building to apply for permits, clutching applications in plastic envelopes, waiting for an unseen soldier to open a gate to usher them in.
Eligible Palestinians – those who do not have a record of activity against Israel – peaceful or violent – receive a magnetic card allowing them to enter Israel. They find jobs through friends or contacts on the Israeli side.
Emad Misbah is one of the lucky ones. He has a special permit that allows him to stay overnight in Israel during the week, avoiding the lengthy daily commute that most face while waiting to cross checkpoints.
The 49-year-old gravedigger works 10 hours a day, and sleeps in a trailer in the cemetery. He goes home once a week.
It isn't easy for the father of eight, but he earns $1,500 a month in the central Israeli city of Petah Tikva. It's more than double what Palestinians make for the same work in the West Bank.
He's waiting for his children to graduate from university before quitting.
"Then I'll open a small business in my village and rest," he said.