this study tackles the economic issues relating to the creation of an independent and self-sufficient palestinian state in the west bank and gaza strip. the study puts forward an outline for a development and reconstruction program for the west bank and gaza strip, and specifies the financial demands of such a program, as well as likely sources of funding. this monograph is a revised verison of a paper first published at the symposium, "the palestinians: new directions," at georgetown university, in may 1989.