Most Jericho residents, ringed by Israeli army checkpoints and adversely affected by fighting in the rest of the West Bank, have had little or no work for two years.
But now there is a possible sign of hope: Tourists are once again being lured to the Mount of Temptation.
"This is more symbolic than anything else, to show we are open," says Kamel Sinokrot, vice president of Jericho's tourist center, which runs a cable car service that was recently restarted. "We are saying we are still alive."
The camera-bearing Palestinians from Jerusalem riding the car up the parched hilltop above Jericho's citrus groves represent but a tiny fraction of the thousands of mostly foreign tourists who used to come daily before the outbreak of the intifada shut down the tourism industry.
Yet these tourists - and the cash they inject - are at the heart of what the Israeli army says is "the Jericho model," billed as an experiment in easing daily living conditions by loosening strictures on movement.
"There is a clear and direct connection between the degree of security stability and the degree of activity by the Palestinian forces in Jericho and Israel taking steps [to ease strictures]," says Lt. Col Alon Evyatar, liaison with the Palestinian security forces.
The curbs on movement were imposed after the intifada started for what Israel says are security reasons, to prevent attacks on soldiers, Jewish settlers, and visitors. Palestinians say the strict curbs, which they describe as a siege, were, and are, intended to devastate economic life and wear out the civilian population.
The limited, tentative change in Jericho comes as the Israeli army makes its voice heard in the discussion of the "road map" toward a two-state peace solution drafted by the US, the European Union, Russia, and the United Nations.
A committee of generals and security- establishment officials this week met with William Burns, the US Middle East envoy who is preparing for a visit by Secretary of State Colin Powell. According to the 1993 Oslo agreement, Jericho, focused on tourism and agriculture rather than politics, was chosen as the experimental launching pad for autonomy in the West Bank.
Unlike other cities, where armed factions have carried out local attacks on troops and suicide bombings against Israeli cities, Jericho has been completely quiet for over a year, according to the Israeli army, and since the start of the intifada, according to Palestinians.
The main step in the current easing has been allowing the East Jerusalem residents and some busloads of Palestinians from other cities into the town, for two years completely off-limits to Palestinians from outside. Jericho residents stress, however, that despite what Israel acknowledges to be complete quiet for over a year, they are still hemmed in by checkpoints, earthen barriers and a huge ditch dug by the army on all sides of the town.
"There is a little change, but it is not so tangible," says money-changer Ali Dana, seated behind a desk adorned with a Koran resting on an adding machine. "Would you like to be living in a cage? I want to know what kind of peace it is that everyone is talking about now. Is it 14 karats, 10 karats, or fool's gold?" On Mr. Dana's television, the Al Jazeera satellite channel was showing pictures of Israel's raid into Gaza City last Thursday, which killed 13 people, including three Hamas fighters and many civilians, and wounded eight soldiers. Jericho residents say actions like that undermine the impact of the local easing.
Municipality spokesman Mohammed Ali says the arrival of East Jerusalem residents has caused a few restaurants to reopen on weekends, but not changed the overall picture. "There is no employment except in the public sector. Every day people come to us looking for work. It is true that you can apply to the army for permission to go outside, but not everyone gets it. You have to be a registered merchant. To farmers and workers, they are saying 'no.' Through one checkpoint, they can control everything."
Colonel Evyatar says a system has been devised allowing people to leave Jericho on army-approved buses to a number of destinations. Further steps are possible if the Palestinian security forces arrest fugitives wanted by Israel, he says. "They are well aware that the ball is in their court," the colonel said, noting that Palestinian police recently turned over a modest cache of confiscated weapons.
"We expect them to act so that the population itself will not be harmed. We have made it very clear to them that one security incident can overturn everything."
Evyatar adds "We hope the Jericho model will impact positively on other locales."
But B'tselem, the Israeli human rights group, says the army's practices violate the Geneva Conventions, which proscribes collective punishment, and that the reasoning behind the model is "cynical." The easing of strictures as a type of reward proves they do not derive from specific security concerns to begin with, says the organization. "Freedom of movement is not a favor to be granted, it is an obligation on the occupying power," says spokesman Lior Yavne.
Asked about the army's model, Saeb Erekat, the Palestinian minister for negotiations, who lives in Jericho, says: "There is a road map drafted by the quartet with obligations on both sides that are clear. We have fully endorsed it, and this road map offers a chance. The most important thing is to see whether the Israeli government responds positively to it."
Jeff Halper, an anthropologist and left-wing Israeli activist, says the real significance of the "Jericho model" lies in highlighting how slow and grudging the peace process is likely to be. "The idea has been to make things so miserable for the Palestinians that even going from Jericho to Jerusalem becomes tremendous. The army is running the negotiations, and the army is looking for strategic advantage and details. They are not going to be magnanimous."