"While Europe may think of itself as part of an enlightened West, using aid to defend Palestinians’ rights, the reality is less reassuring. The aid may actually be making things significantly worse.

Shir Hever, an Israeli economist who has spent years piecing together the murky economics of the occupation, recently published a report that makes shocking reading.

Like others, he believes international aid has allowed Israel to avoid footing the bill for its decades-old occuption. But he goes further.

His astonishing conclusion – one that may surprise Israel’s settlers – is that at least 78 per cent of humanitarian aid intended for Palestinians ends up in Israel’s coffers.

The sums involved are huge. The Palestinians under occupation are among the most aid-dependent in the world, receiving more than $2bn from the international community a year. According to Hever, donors could be directly subsidising up to a third of the occupation’s costs.

Other forms of Israeli profiteering have been identified in previous studies.

In 2013 the World Bank very conservatively estimated that the Palestinians lose at least $3.4bn a year in resources plundered by Israel.

Further, Israel’s refusal to make peace with the Palestinians, and as a consequence the rest of the region, is used to justify Washington’s annual $3bn in military aid.

Israel also uses the occupied territories as laboratories for testing weapons and surveillance systems on Palestinians – and then exports its expertise. Israel’s military and cyber industries are hugely profitable, generating many billions of dollars of income each year.

A survey published last week found tiny Israel to be the eighth most powerful country in the world.

But whereas these income streams are a recognisable, if troubling, windfall from Israel’s occupation, western humanitarian aid to the Palestinians is clearly intended for the victims, not the victors.

So how is Israel creaming off so much?

The problem, says Hever, is Israel’s self-imposed role as mediator. To reach the Palestinians, donors have no choice but to go through Israel. This provides ripe opportunities for what he terms “aid subversion” and “aid diversion”.

The first results from the Palestinians being a captive market. They have access to few goods and services that are not Israeli."