It's well known that the violence in Israel and the territories since Sep. 2000 has taken a very heavy toll on both the Israeli and Palestinian economies.

Israeli GDP growth has gone to -3.4%, 50,000 Israeli businesses have gone bankrupt, unemployment has risen from 8% to 10%, industrial production, construction, and of course high tech has plunged, 150,000 Palestinians working in Israel have lost their jobs, the Palestinian economy has been flattened.

In Israel, the governent is scrambling to find $3 billion in budget cuts, and more and more Israelis are calling for cuts in subsidies to West Bank settlers.

and here's perhaps the most ironic story:

Right-wing Israeli religious parties and the Israeli Arab parties have formed an alliance to block cuts in subsidy payments under the Large Families Law, which provides financial incentives to Israelis to have large families. (That sounds like a really bad law btw, but at least it's applied equally to Jew and non-Jew alike)