Economic Implications In A Humanitarian Issue

Today I attended a lecture on a student's encounter of his summer in Palestine. While it dealt more with relations between Israel and Palestine on a civil and military basis, it has some weight in IPE as well. There are currently about 700,000 refugees in the West Bank, often living in refugee camps with high unemployment rates, water crises, rudimentary sewage systems, and low education levels. These living standards are far below humanitarian levels and are exacerbated by Israeli control. Israel dictates the water sources, so there is severely unequal distribution, with Israeli citizens receiving subsidies on water and Palestinians receiving water only about every 15 days, much less subsidies. Many refugees also have mental health disorders, including PSTD, trauma from minors being in adult prisons, and trauma from house demolitions.
One large irony in this is that the United States finances and provides the knowledge base to Israel. Through our efforts, these immoral acts are sustained. Furthermore, the economy in the area is not stable enough to sustain new industries, so a severely high unemployment rate persists. Even when people obtain a high education, they are forced to sneak into Israel illegally for work, even if just for construction jobs. People are being forced to work far below their capability, as engineers and teachers are working service industry and manufacturing jobs.
This problem is undoubtedly a humanitarian concern revolving around military occupation, but there are also economic aspects. The most prevalent are the domestic aspects, as the economy is all but perfectly competitive, so the demand for jobs does not result in the creation of those necessary jobs.
This case study specifically heightens the claim we have discussed that not every economy would benefit from an American economy. When we observe a political state in which refugee camps, unjust government practices, and severe inequality exist, we cannot apply a textbook solution. The international sphere requires heightened governance, as Stiglitz suggests, to even begin to combat these issues. We cannot allow for market forces to correct all issues in an advanced economy, much less an almost nonexistent one.
While the US aid to Israel is given under moral intentions, without an international body to ensure the funds are well spent, we are inadvertently funding the Palestinian situation. This concern is humanitarian, but if we neglect the economic implications, we will only allow this cycle to continue and no solutions will be found.