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The Gaza strip has been systematically economically destroyed for over 20 years. The border with Israel has been strictly controlled since Hamas came to power in 2007. Israel does not allow goods to cross the Gaza-Egypt border directly, everything must go through Israel. There are only 2 border crossings, and all import and export is strictly controlled. Import of any goods marked "dual-use" (possibly useful for both military and civilian) is limited. About 80% of business in the Gaza strip has closed doors since the blockade began. Even "internal" trade is hampered by the blockade. Palestinian fishermen in Gaza, who want to sell their fish to Palestinians in the west bank, are restricted by a fish export quotum imposed by Israel. This quotum was halved by Israel last year, cutting income of the fishermen in half.
Infrastructure is periodically destroyed. In accordance with peace accords from the nineties, a seaport was being constructed in Gaza with European funding. However, in 2001 Israeli tanks destroyed the construction site, and bombed the site again several months later. European companies then pulled out of the project. Since 2007 Israel blockades the Gaza strip fully by sea also. A similar fate befell the Palestinian airport: the radar station and control tower were bombed, and bulldozers have cut the runways, rendering it inoperable.
Furthermore, Israel collects tax on behalf of the Palestinian state. These taxes form about 60-70% of Palestine's income. Israel regularly suspends payments as "punishment" for terrorist attacks. It also keeps part of the taxes collected for itself before transferring the remainder to Palestine. The amount withheld was doubled last year by the Israeli minister of finances.
Another important source of income for Palestinians is labor in Israel. Palestinians are used as a source of cheap labour by Israel in the construction, industrial, and agricultural sectors. When the current war broke out, most of the workers were arrested and deported to the West Bank, even though they actually live in the Gaza strip. Some are stuck there while their families in Gaza die in the retaliatory bombardments.