"There's no future in Gaza." Aid workers say that's the view being voiced throughout the coastal enclave which is struggling to recover after an Israeli offensive early this year flattened thousands of houses and damaged dozens of schools and hospitals.

Six months after the campaign, many families are still living in tents or homes with broken windows and smashed walls. Donkey carts are being used to clear away rubble. Thousands of people have no running water and there are frequent power cuts.

Aid groups say the suffering is made worse by Israel's two-year blockade of Gaza, which continues to frustrate reconstruction efforts and strangle the economy, forcing four out of five Gazans to rely on foreign aid.

"Gaza will remain in a state of abject destitution unless the blockade is lifted," said Christopher Gunness, spokesman for the U.N. Relief and Works Agency (UNRWA).

Antoine Grand, head of the Gaza office of the International Committee of the Red Cross, said a survey the ICRC carried out last year revealed that more and more people were living in poverty and becoming dependent on aid.

"That was before the war - it's even worse now," Grand said.

"People have been traumatised by the war, they are very tired and depressed - and that's probably what will have the longest impact," he added.

"DIRE SITUATION"

Israel has long restricted entry of goods into Gaza, and tightened its blockade in 2007 after Islamist group Hamas took control of the sliver of territory - home to 1.5 million Palestinians - from the rival Fatah faction of President Mahmoud Abbas.

Late last December, Israeli forces bombed and then invaded Gaza to rout out militants firing rockets into Israel in an operation that devastated its already battered infrastructure.

Since then, Israel has barred imports of building materials, including steel, cement and pipes, fearing that Hamas could use them to manufacture weapons.

Donor countries pledged $4 billion in March to help the Palestinian economy and rebuild the Gaza Strip, but aid workers say the money cannot be spent if border crossings stay closed. And until the border is open to goods and trade, Gaza's people will have little chance of rebuilding their homes and their lives.

"The situation is obviously more dire than before the Israeli offensive. The amount of aid coming through is not acceptable," said Elliott Woods, a researcher and analyst for CARE International who is based in Gaza.

"The one thing we are completely unable to get in, as the international community, are materials for construction. It's so desperate that people are trying to build houses with mud bricks."

PAYING THE PRICE

Aid workers say the amount of supplies allowed into Gaza is a quarter of the flow before the blockade was tightened. Some food and vital medicine are filtering through, but clothes, shoes, toys and school books are frequently prohibited.

Seedlings and calves are not allowed through which means a healthy, balanced diet is beyond the reach of most Gazans.

Medicine, along with other goods, is also being smuggled through the tunnels that run under the border between Gaza and Egypt, but the drugs are often very expensive, out of date or of poor quality.

Aid workers say hospital staff must wait up to three months before being able to replace or get spare parts for medical equipment such as X-ray and dialysis machines.

The situation has prompted more than 40 international and U.N. aid agencies to call for "free and uninhibited access" for all humanitarian assistance, as well as a return to normalised trade as a way of combating high levels of poverty and joblessness.

"The population should not have to collectively pay the price for the conflict," said ICRC's Grand.

Unemployment in Gaza is close to 50 percent. Aid workers say the blockade means university graduates have no outlets for their skills, and Palestinian labourers who used to work in Israel cannot move freely. Doctors are unable to cross the border to sharpen their expertise.

Israel's government has tied the lifting of the blockade to the release of Gilad Shalit, an Israeli soldier captured by militants three years ago. During his captivity, no Israeli or international groups have been allowed to visit Shalit, and he has been kept incommunicado except for a few letters and a tape-recorded message.

But many in Gaza say the kidnapping does not justify the blockade - which they call collective punishment - and fear the Israeli strategy will ultimately play into the hands of militants.

"People are beginning to realise that strangulation of the economy by the blockade can only strengthen Hamas," one aid worker said.

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