The bank also said Monday that the Palestinian economy will not recover unless restrictions are eased significantly.

Palestinian traders face many obstacles, including roadblocks in the West Bank. Palestinian goods have to be loaded from one truck to another at crossings into Israel or Jordan. The report says it takes two hours on average to move cargo through crossings. Delays are expected to get worse.

Many restrictions were imposed after the outbreak of Israeli-Palestinian fighting in 2000. Despite a return to calm, Israel says it must move cautiously in easing restrictions. -- AP