GAZA CITY — The payday line at a downtown A.T.M. here in Gaza City was dozens deep with government clerks and pensioners, waiting to get what cash they could.

Muhammad Abu Shaaban, 45, forced into retirement two months ago, stood six hours to withdraw a $285 monthly check — a steep reduction from his $1,320 salary as a member of the Palestinian Authority’s presidential guard.

“Life has become completely different,” Mr. Abu Shaaban said, his eyes welling up. He has stopped paying a son’s college tuition. He buys his wife vegetables to cook for their six children, not meat.

And the pay he had just collected was almost entirely spoken for to pay off last month’s grocery bills. “At most, I’ll have no money left in five days,” he said.

Across Gaza, the densely populated enclave of two million Palestinians sandwiched between Israel and Egypt, daily life, long a struggle, is unraveling before people’s eyes.

At the heart of the crisis — and its most immediate cause — is a crushing financial squeeze, the result of a tense standoff between Hamas, the militant Islamist group that rules Gaza, and Fatah, the secular party entrenched on the West Bank. Fatah controls the Palestinian Authority but was driven out of Gaza by Hamas in 2007.

At grocery stores, beggars jostle with middle-class shoppers, who sheepishly ask to put their purchases on credit. The newly destitute scrounge for spoiled produce they can get for little or nothing.

“We are dead, but we have breath,” said Zakia Abu Ajwa, 57, who now cooks greens normally fed to donkeys for her three small grandchildren.

The jails are filling with shopkeepers arrested for unpaid debts; the talk on the streets is of homes being burglarized. The boys who skip school to hawk fresh mint or wipe car windshields face brutal competition. At open-air markets, shelves remain mostly full, but vendors sit around reading the Quran.

There are no buyers, the sellers say. There is no money. Read more at NY Times