Gaza's unemployment rate was among the world's highest, at 45.2% in late 2010, the UN has found, as Israel's blockade of the territory enters its fifth year.Real wages meanwhile fell by more than a third, the UN Relief and Works Agency for Palestine Refugees (UNRWA) said.
Its report says that private businesses have been hardest hit by the continuing ban on virtually all exports.
Israel tightened sanctions on Gaza in 2006 after militants captured Israeli soldier Gilad Shalit.
'Disturbing' The blockade tightened again a year later when Hamas ousted rival Palestinian organisation Fatah from the territory.
UNRWA spokesman Chris Gunness said of the report in a statement: "These are disturbing trends and the refugees, who make up two-thirds of Gaza's 1.5 million population, were the worst hit."
The unemployment figure, for the second half of 2010, was a slight improvement on the 45.7% jobless rate during the same period in 2009.
But it was an increase from the first half of 2010, when a temporary building boom boosted jobs.
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End Quote Chris Gunness UNRWAIf the aim of the blockade was to weaken Hamas, the employment numbers suggest this has failed”
The UN report says that while private businesses have suffered most, the Hamas-run public sector is one of the few areas where there has been economic growth, with the government employing tens of thousands of people.Mr Gunness said the research had found that since 2007 Hamas had been able to increase public employment by at least one fifth.
"If the aim of the blockade policy was to weaken the Hamas administration, the public employment numbers suggest this has failed," he added.
The BBC's Jon Donnison, in Gaza, says one notices the tremendous number of people in the coastal strip sitting around with time on their hands.
In one of the main park areas running through the heart of Gaza City, young men sit at virtually every bench smoking, chatting and shading themselves from the sun, our correspondent says.
Israel says the measures against Gaza are necessary to stop weapons smuggling and to put pressure on Hamas, but the UN insists the restrictions amount to collective punishment of Gaza's population.
The blockade was eased by Israel last year in response to international pressure, after nine Turkish activists were killed in an Israeli raid on a convoy of aid ships seeking to enter the territory.
Restrictions at Gaza's border with Egypt have been eased since the ousting of Egyptian President Hosni Mubarak this year.
A change of policy by Cairo has seen the southern border crossing at Rafah opened daily for civilian traffic, but not for trade.
Although Hamas won Palestinian legislative elections in January 2006, it refuses to recognise Israel or to renounce violence and is designated in the West as a terror organisation.