The war between Israel and Egypt, Syria, and Jordan in June 1967 ended with Israel in control of the West Bank, East Jerusalem, the Gaza Strip, the Sinai Peninsula, and the Golan Heights. Israel withdrew from the Sinai Peninsula pursuant to a 1979 peace treaty with Egypt. Under the DOP, final status negotiations are to begin no later than the beginning of the third year of the transitional period. A transfer of powers and responsibilities for the Gaza Strip and Jericho has taken place pursuant to the Israel-PLO 4 May 1994 Cairo Agreement on the Gaza Strip and the Jericho Area. The DOP provides that Israel will retain responsibility during the transitional period for external security and for internal security and public order of settlements and Israelis.
Final status is to be determined through direct negotiations within five years.
The Persian Gulf crisis and its aftershocks also have dealt blows to Gaza since August 1990. Worker remittances from the Gulf states have dropped, unemployment has increased, and exports have fallen. The withdrawal of Israel from the Gaza Strip in May 1994 brings a new set of adjustment problems.