The building boom seems to be a good sign, confirming Israeli assertions that the economy in the occupied West Bank is flourishing. But on second thought, my enthusiasm faded. After all, the money invested in residential buildings does not go to factories or other enterprises that provide jobs and promote real growth. It only shows that some people are getting rich even under the occupation.

My destination was a diplomatic reception. Some high functionaries of the Palestinian Authority and other upper-class Palestinians attended.

I exchanged pleasantries with the Palestinian Prime Minister, Salam Fayyad, and some of the well-dressed guests, and enjoyed the delicacies. I did not discern any excitement.

Nobody would have guessed that at that very moment, in the center of the city, a stormy demonstration was taking place. It was the beginning of a massive protest that is still going on.

THE DEMONSTRATORS in Ramallah and other towns and villages in the West Bank are protesting against the high cost of living and the economic hardship in general.

Palestinian journalists told me that the price of gasoline in the West Bank is almost the same as in Israel: about eight shekels per liter. That would be about eight dollars per gallon in the US or 1.7 Euro per liter in Europe. Since the minimum wage in the West Bank, about 250 $ per month, is only a quarter of the Israeli minimum wage, that is atrocious. (This week the Palestinian Authority hastily lowered the price.)

Recently, on the Muslim Eid al-Fitr holiday ending the Ramadan month of fasting, the occupation authorities surprisingly allowed 150 thousand Palestinians to enter Israel. Some went straight to the sea shore, which many of them had never seen before, though they live less than an hour’s drive away. Some went to visit ancestral homes. But many others went on a shopping spree. It appears that many goods are actually cheaper in Israel than in the impoverished occupied territories!

(By the way, not a single incident was reported that day.)

THE PROTESTS were against the Palestinian Authority. It’s a bit like a dog biting the stick, instead of the man who is wielding it.

Actually, the PA is quite helpless. It is bound by the Paris Protocol, the economic appendix of the Oslo agreement. Under this protocol, the occupied territories are part of the Israeli “customs envelope” and the Palestinians cannot fix their own customs duties.

Amira Hass of Haaretz quotes the following conditions: inhabitants of the Gaza Strip are not allowed to export their agricultural products; Israel exploits the water, minerals and other assets in the West Bank; Palestinian villagers pay much higher prices for water than Israeli settlers; Gaza fishermen cannot fish beyond three miles from the shore; Palestinian inhabitants are forbidden to travel on the main highways, compelling them to make costly and time-consuming detours.

But more than any restrictions, it’s the occupation itself that makes any real improvement impossible. What serious foreign investor would go to a territory where everything is subject to the whims of a military government which has every motive for keeping its subjects down? A territory where every act of resistance can provoke brutal retaliation, such as the physical destruction of Palestinian offices in the 2002 “Operation Defensive Shield”? Where goods for export can rot for months, if an Israeli competitor bribes an official?

Donor nations can give some money to the Palestinian Authority to keep it alive, but they cannot change the situation. Neither would the abolition of the Paris Protocol, as demanded by the demonstrators, change much. As long as the occupation is in place, any progress – if there is any - is conditional and temporary.

STILL, THE situation in the West Bank remains far better than the situation in the Gaza Strip.

True, as a result of the “Turkish flotilla”, the blockade of the Strip has been lifted to a large extent. Almost everything can now be brought into the Strip from Israel, though almost nothing can be brought out. Also, the naval blockade is in full force.

However, lately the situation there has been improving rapidly. The hundreds of tunnels under the Egyptian-Gaza border are in practice bringing in everything, from cars to gasoline to building materials. And now, with the Muslim Brotherhood in power in Egypt, this border may be opened completely, a step that would radically change the economic situation of the Strip.

Nabeel Shaath, the top Palestinian diplomat, told me at the reception that this may actually be a major obstacle to PLO-Hamas reconciliation. Hamas may want to wait until the economic situation in the Strip surpasses that in the West Bank, reinforcing their chances to win all-Palestinian elections again. Mahmoud Abbas, on his part, hopes that the new Egyptian president will convince the Americans to support the West Bank and strengthen his Authority.

(When I reminded Shaath that years ago I attended his wedding at Jerusalem’s now desolate Orient House, he exclaimed: “We thought then that peace was just a step away! Since then, we have been thrown a long distance back!”)

DESPITE THE economic troubles, the picture of the Palestinians as a helpless, pitiable victim is far removed from reality. Israelis may like to think so, as well as pro-Palestinian sympathizers around the world. But the Palestinian spirit is unbroken. Palestinian society is vibrant and self-reliant. Most Palestinians are determined to achieve a state of their own.

Abbas may ask the UN General Assembly to recognize Palestine as a “non-state member”. He may do so after the US elections. I wondered aloud if this would really change the situation. “It certainly would!” a prominent Palestinian at the reception assured me. “It would make clear that the Two-State solution is alive and put an end to the nonsense about a bi-national state.”

On the way to the reception I did not see a single women in the streets with her hair uncovered. The hijab was everywhere. I remarked on this to a Palestinian friend, who is quite unreligious. “Islam is gaining,” he said. “But that may be a good thing, because it is a moderate form of Islam that will block the radical ones. It is the same as in many other Arab countries.”

I did not perceive any sympathy for the Ayatollahs of Iran. But nobody wished for an Israeli attack. “If Iran bombs Israel in retaliation,” Nabeel Shaath remarked, “their missiles will not distinguish between Jews and Arabs. We live so close to each other, that Palestinians will be hit like the Israelis.”

SINCE my visit, the demonstrations in Ramallah have intensified. It seems that Fayyad serves as a kind of lightning rod for Abbas.

I don’t think that this is just. Fayyad seems to be a decent person. He is a professional economist, a former official of the International Monetary Fund. He is not a politician, not even a Fatah member. His economic viewpoint may be conservative, but I don’t think that this makes much of a difference considering the situation in Palestine.

Sooner or later, and probably sooner rather than later, the wrath of the Palestinian poor will change direction. Instead of blaming the Palestinian Authority, they will turn against their real oppressor: the occupation.

The Israeli government is aware of this possibility, and therefore made haste to pay the PA an advance on the tax money that Israel owes the PA. Otherwise the PA – by far the biggest employer in the West Bank – would be unable to pay salaries at the end of this month. But that is only a stopgap measure.

Binyamin Netanyahu may stick to the illusion that all is quiet on the Palestinian front, so that he can concentrate on his efforts to get Mitt Romney elected and frighten Iran. After all, when Palestinians are protesting against Palestinians, that’s OK. The Israeli-Palestinian conflict is frozen. No problem.

But this illusion is, well, an illusion. In our conflict, nothing is ever frozen.

Not only are the settlement activities going on steadily - if quietly - but on the Palestinian side, too, things are moving. Pressures are building up. At some time, they will explode.

When the Arab Spring finally arrives in Palestine, its main target will not be Abbas or Fayyad. Abbas is no Mubarak. Fayyad is the very opposite of a Qaddafi. The target will be the occupation.

Some Palestinians dream about a new intifada, with masses of people marching non-violently against the symbols of the occupation. This may be too much to hope for – Martin Luther King was no Arab. But the demonstrations in Ramallah and Hebron may be a sign of things to come.

There is still truth in the old saying, that the conflict here is a clash between an irresistible force and an immovable object.