Tunnels under the Egyptian border have been a lifeline for Gaza in recent years.
The Gaza Strip will not be “a liveable place” by 2020 unless action is taken to improve basic services in the territory, according to a UN report.
Basic infrastructure in water, health, education and sanitation “is struggling to keep pace with a growing population”, according to the report.
It estimates Gaza’s population will rise from 1.6m to 2.1m by 2020.
Israel tightened a blockade on Gaza after the Islamist movement Hamas came to power in the territory in 2007.
Israel says the blockade, which is policed with Egyptian co-operation and has never been fully lifted, is necessary to prevent weapons reaching Hamas.
The UN report estimates Gaza will need double the number of schools and 800 more hospital beds by 2020, and says the territory is already suffering from a housing shortage.
The report also says the coastal aquifer, the territory’s only natural source of fresh water, may become unusable by 2016.
UN officials point to the difficulty of improving the situation given “the closure of the Gaza Strip, violent conflict, and the pressing need for Palestinian reconciliation”.
“An urban area cannot survive without being connected,” said Maxwell Gaylard, the UN’s humanitarian chief in Gaza.
Gaza has no air or sea ports, and the economy is heavily dependent on outside funding and smuggling through tunnels under the Egyptian border.
Even though Gaza has experienced some economic growth in recent years, the report says it “does not seem to be sustainable” and finds that Gazans are worse off now than in the 1990s.
Unemployment was at 29% in 2011 and has risen since then, particularly affecting women and young people.
Traffic through the cross-border tunnels was hit in recent weeks by violence between Egyptian security forces and militants in Egypt’s Sinai peninsula, which borders Israel and Gaza.