By KARIN LAUB, Associated Press Writer Wed May 9, 6:22 AM ET Israel's use of roadblocks, a separation barrier and travel permits to restrict the movement of Palestinians in the West Bank at times goes beyond Israel's security needs to enhance the expansion of Jewish settlements, the World Bank said in a report Wednesday. The international lending agency said the controls have carved up the territory into 10 enclaves and restricted Palestinian access to some 50 percent of the land. The Palestinian economy, devastated by the conflict with Israel, cannot recover as long as Israel maintains its web of physical and administrative obstacles, the World Bank said. "The system has created such a high level of uncertainty and inefficiency that the normal conduct of business in the West Bank has become exceedingly difficult and investment has been stymied," said David Craig, the World Bank's director for Israel and the Palestinian territories. "Restoring sustainable Palestinian economic growth is dependent on its dismantling." The World Bank regularly evaluates the Palestinian economy but this report was exceptionally harsh, coming just a month before the 40th anniversary of the Mideast War, in which Israel captured the West Bank, Gaza and east Jerusalem. The 18-page document was also the first comprehensive compilation of all the restrictions by an organization with such weight. The World Bank has been a key player in previous negotiations between Israel and the Palestinians on improving Palestinian conditions. Israel insists security is its only concern. "We have no interest whatsoever in seeing a failed Palestinian economy," said Israeli Foreign Ministry spokesman Mark Regev. "Many of the current problems are a direct result of terrorism, violence and political instability inside the Palestinian territories ... and the overall anarchy that exists." Many of the restrictions were imposed or tightened during the second Palestinian uprising, which began in 2000 and was accompanied by suicide bombings and shooting attacks. In 2002, Israel began building a separation barrier that it says is meant to keep out attackers, but also puts some 8.5 percent of West Bank land on the "Israeli" side. The World Bank acknowledged what it says are Israel's legitimate security concerns. However, it says the restrictions are also aimed at "protecting and enhancing the free movement of settlers and the physical and economic expansion of the settlements at the expense of the Palestinian population." The bank estimated that Israel restricts Palestinian access to more than 50 percent of the West Bank, including land around Jewish settlements. Some 450 miles of major West Bank roads are for non-Palestinians only, forcing Palestinian drivers to use sometimes circuitous side roads. About 250,000 Israelis live in 121 settlements in the West Bank, twice as many as the 126,900 present in the area at the time of 1994 interim peace deals between Israel and the Palestinians. Between 2001 and 2005, the settler population grew by 5.5 percent a year, while the population within Israel grew by 1.8 percent a year. Today the settlements account for 9 percent of the West Bank based on their municipal boundaries. They have jurisdiction over an even larger area for agriculture, industry and eventual expansion. The report treated the West Bank and east Jerusalem as one unit, in line with the refusal of much of the world to recognize Israel's annexation of the eastern sector of the city after the 1967 war. As well as physical obstacles, the World Bank considered the impact of administrative controls. Israel runs a population registry in the West Bank, Gaza and east Jerusalem, determining who receives ID cards, and thus residency rights, after the age of 16, the bank noted. The registry is linked to a permit system, which can be used to control the movement of Palestinians outside their immediate municipal area and to restrict access to large parts of the West Bank. For example, at the height of the Palestinian uprising, men between the ages of 18 and 35 needed a special permit to leave the West Bank city of Nablus, considered a militant stronghold. The requirement was lifted a month ago. Palestinian visitors to the West Bank resort of Jericho can only leave via the main checkpoint if they are residents of particular areas of the West Bank. Others have to leave through a smaller checkpoint that leads to a mountain road and extends their trip. "As long as large areas of the West Bank remain inaccessible for economic purposes ... and unpredictable movement remains the norm for the vast majority of Palestinians, sustainable economic recovery will remain elusive," the bank wrote. Former Palestinian Planning Minister Ghassan Khatib said he expects the World Bank will succeed where the Palestinians have failed â in presenting their difficulties to the international community. "It helps convince the relevant governments and public opinion of the actual reality that the Palestinians have been trying to explain without much success," said Khatib, who helped negotiate an Israeli-Palestinian agreement in November 2005 on easing movement and access for the Palestinians. That plan, brokered by the U.S., ran aground over renewed fighting. The U.S. recently proposed a timeline for implementing sections of the agreement, including lifting many West Bank roadblocks and improving operations at Gaza's bottleneck border crossings. Israel reacted skeptically, while the Palestinians withheld judgment. Economists have said economic growth is vital to reducing the Palestinians' dependence on foreign aid, which topped $1 billion last year despite a Western boycott of the Hamas-led Palestinian government. Even with the large amounts of assistance coming in, the Palestinian Gross Domestic Product dropped by 6.6 percent in 2006. Copyright Â© 2007 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.