A Palestinian smuggler exits a tunnel that runs between Egypt and Rafah in the southern Gaza Strip on June 3, 2010  Said Khatib / AFP / Getty Images  Days after the Israeli seizure of a flotilla of Turkish ships bound for Gaza that left nine pro-Palestinian activists dead and triggered worldwide condemnation, activists aboard an Irish-flagged aid vessel are bracing for the next round, while Israelis debate how to solve the problem. The 1,200-ton Rachel Corrie, named for the pro-Palestinian American activist who was killed in Gaza by an Israeli bulldozer, is heading south from Cyprus through the Mediterranean with a cargo of aid and banned building materials for the Hamas-controlled enclave.  Israeli leaders still stunned by the fallout from the May 31 flotilla raid are determined to stop the Rachel Corrie as well as not cause any more deaths that will hand Hamas and its supporters another p.r. victory. "We shall not allow the ships to reach Gaza  not now and not later on," Israeli Prime Minister Benjamin Netanyahu told his ministers. "We intend to direct the Rachel Corrie ship to the Ashdod port and transfer its civilian goods to Gaza following a security check." (See pictures of Israeli commandos storming the Turkish ships.)  Palestinians in Gaza eagerly awaited the drama unfolding off the coastline, hailing the Free Gaza Movement and the Turkish group IHH  which allegedly has jihadist sympathies  as heroes, with street marches and banners fluttering from buildings close to the tiny Gaza City port. The excitement is a change from the daily grind of survival, which can take many forms in the enclave's shadowy economy.  Every day, a long line of Palestinians queues outside the USAID distribution center in Beit Lahiya, north of Gaza City. Thursday was the turn of families with nine or more children; they have been issued with the relevant papers, allowing them to collect 3 kg of salt, 12 kg of sugar, 12 kg of beans, 16 L of olive oil and four 50-kg sacks of wheat flour. After 40 days, they will return for more. "The proportion of the population dependent on aid has risen to 80%, the number of the poorest of the poor has risen from 100,000 to 300,000 in the past year alone, and unemployment has reached 44%," says Chris Gunness, spokesman for UNRWA, the U.N. body that has been assisting Palestinian refugees since 1949. "How can anyone say there isn't a humanitarian crisis?"  At the Islamic University in Gaza City, two buildings on the campus are still in ruins nearly 18 months after they were bombed flat by Israeli jets during the war that ended in January 2009. Israel said the university's technology labs were being used for research and development to improve the 8,000 Qassam rockets that have been fired across the border since April 2001  a charge the university flatly denies. University president Kamalain Sha'ath needs $50 million to rebuild the wrecked labs and replace damaged equipment, but Israel will not even let him bring in any building materials. (See pictures of life under Hamas in Gaza.)  Sha'ath continues to educate his 21,000 students, but he knows their chances of employment are slim. Last year, there were 20,000 applications for 2,700 teaching jobs advertised by the Ministry of Education and 1,700 applications for 50 English-language teaching positions at UNRWA. "The economy of Gaza cannot generate the number of jobs required for all of these people. With the blockade, it became more and more complicated," Sha'ath tells TIME.  The Israeli and Egyptian blockade was imposed in earnest after Hamas, the Islamist militant organization that came to power in parliamentary elections in January 2006, won control of Gaza and its population of 1.4 million in July 2007 after a vicious Palestinian civil war. The blockade was supposed to persuade Gazans to topple the Hamas government; secure the release of Israeli Corporal Gilad Shalit, who was abducted in June 2006; and end the firing of Qassam and other rockets across the border. None of those objectives has been achieved.  See the diplomatic fallout from the Gaza flotilla fiasco.
A visit to the Palestinian coastal enclave of Gaza shows a humanitarian crisis as well as an economy that manages to tick on despite the Israeli-Egyptian blockade