A boy stands by while people walk over a bridge destroyed by an Israeli airstrike on Gaza. (Omar Naaman, IRIN)

As the sun beat down on the city's central market, Khitam Shahleen, 37, glumly picked through a pile of cheap pencil sharpeners, searching for something -- anything -- she could afford to buy her two sons for the start of the new school year.

"We don't have money," Shahleen said, eyes downcast beneath her head scarf. Her husband, who works as a laborer in Israel, has been trapped inside the Gaza Strip by a blockade. "We are imprisoned here," she said.

The war in southern Lebanon has overshadowed Israel's second front, a military and economic siege of the Gaza Strip that is deepening the poverty and desperation in this dense area of 1.4 million people.

More than 200 Palestinians, at least 44 of them children, have been killed in the past 8 1/2 weeks. Three Israeli soldiers have been killed. Huge Israeli bulldozers and "pinpoint" missiles have razed at least 40 houses and dozens of other buildings, according to the army, leaving many families homeless.

Daily skirmishes regularly result in new casualties. The Israelis attack with tanks, F-16 jets and artillery. [Early Monday, an Israeli airstrike killed four members of the Hamas-led security force in the Gaza Strip, the Reuters news agency reported, citing medics and witnesses. An Israeli army spokeswoman confirmed the report, but said two of the men were apparently killed by gunfire from ground troops.]

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The Palestinians launch an average of about six crude Qassam rockets a week into Israel, causing minimal damage, no fatalities and about a dozen injuries since June 28, an army spokesman said.

"Any Qassam fired toward Israel is one too many," said Maj. Tal Lev-Ram, a spokesman for the Israeli army's Southern Command. "Every act of terrorism against Israel will be dealt with severely from our side."

After Israel completed its unilateral withdrawal from Gaza last September, ending a 38-year presence, Palestinians expected an explosion of commerce and opportunity in this sandy strip, which is about twice the size of Washington with almost three times the population.

But after the election in January of a parliament dominated by Hamas, the radical Islamic movement that refuses to recognize Israel's right to exist, international donors led by the United States cut off aid to the Palestinian Authority. Israel stopped transferring the tax revenue it collects for the Palestinians, and the Palestinian Authority's monthly income dropped from $150 million to $20 million or less, according to the United Nations.

Since then, the Gaza Strip's economy has been strangled. The largest employer, the Palestinian Authority, has been unable to pay more than token salaries to its 160,000 employees -- teachers, clerks, health care workers, police officers -- in six months.

Israel has enforced a blockade, allowing almost no goods to leave Gaza and only limited food supplies to enter. Most industry has shut down. Electricity and water services have been intermittent since Israel bombed the main power station here.

"Gaza is heading down the tubes," said John Ging, director of operations for the United Nations Relief and Works Agency, or UNRWA. "We are now down to a subsistence existence. It's down to getting containers of food into here."

In the market in Gaza City, Mohammed Abu Aqleen, 37, held his head morosely Saturday, leaning on a pile of blue jeans. "Nobody has any money. Nobody buys," he said, adding that he is lucky to make $7 a day.

"Under this siege, I feel like I am in a big prison," he said. "No one can leave. The country is closed now. We are under the control of someone else. You can't even go to the edge of your country safely."

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