Unfailingly polite, and spotless in their uniforms of blue and white striped smocks, the teenage pupils from the UN Relief and Works Agency Girls' Preparatory A school in Al Deraj were initially shy about talking about why they had wound up in a remedial class.

"We can't concentrate," said Kholoud Shehada, 15. "We have other things on our minds." What exactly? Kholoud paused before saying hesitantly: "My father is unemployed."

Gradually emboldened the girls began to speak up. They would like new clothes for next week's Eid al Fitr, one of the two great religious festivals in the Muslim calendar, and a time of giving and celebration; but they know it is unlikely. "There are many things we are lacking," said Raja Abu Asser, 16. "Our parents are unemployed. It is difficult for them even to get the basic stationery we need. Living conditions are difficult. We love our school but we would like a happy Eid." And there are other problems at home, some at least a result of a Gaza unemployment rate which a World Bank official suggested in July could reach an unprecedented 44 per cent. "Some of the girls' parents are fighting with each other," said Sojoud Nattat, 15.

With their ready smiles and warm welcome for visitors, the girls are touching on – and understating – only a few of the factors that have caused a devastating deterioration in educational indicators across the Gaza Strip, riven over the past two years by conflict, both internal and external, and by ever-deepening poverty.

UNRWA figures show that in their schools – which cater for the refugee families who make up three-quarters of Gaza's 1.4 million population – the exam failure rates in Arabic for grades 4 to 9 (ages nine to 15) range from 34.9 per cent for grade 4 to a peak of 61.1 per cent at grade 8.

And the figures for mathematics are worse still. At every grade between four and nine more than 65 per cent fail and at grade six the failure rate is 90 per cent.

And to reinforce the point that the problem is specific to Gaza (or at least to the occupied territories; the exam system in the West Bank makes a comparison impossible) the results are dramatically worse than those for UNRWA-run Palestinian refugee camps in Lebanon and Syria. In Lebanon, just over 90 per cent of Palestinian children passed the Baccalaureate 2 exam in the last academic year; in Syria just under 90 per cent passed the Preparatory State exam.

The results would be a shock anywhere; for Palestinians who, not least in Gaza, set the highest value on education it is social catastrophe. Amna Nabahin, the school's resourceful head, is in no doubt that poverty and unemployment are top of a long list of "inter-related factors". Of course the years of bloody conflict have taken their toll; but a child "whose parents cannot meet the basic needs like a uniform, stationery or pocket money will be anxious and not progress with their studies," she says.

Against a background of two years of a draconian international economic boycott and – since Ham s's bloody takeover in June – a continuous closure by Israel of the main Karni crossing which has seen manufacturing industry shut down and more than 50,000 workers laid off, 10 per cent of the girls admit to coming to school with no breakfast – and the true number is probably higher. "Many girls are very shy and embarrassed to say they have had no breakfast," she adds.

With locally raised donations she has instituted a free school breakfast programme. Such is the solidarity among the girls that "one girl came to us and said her father had got a job and she wanted another girl to take her place for free breakfasts". She said that the mother of one girl who stayed away for the first month finally came to her and admitted that it was because she could not afford the uniform – which Mrs Nabahin then managed to provide.

Whether because they are too busy trying to keep their families together or look for jobs, or because of the apathy often induced by unemployment Mrs Nabahin says only around half of the 120 parents invited to a recent meeting attended. One item on the agenda was domestic violence – husbands against wives, fathers against children and brothers against sisters – which Mrs Nabahin says has increased over the past two to three years. "A father who is unemployed will become aggressive and that will affect family life and make the child less creative," she adds. With an acute shortage of classrooms, the school day is truncated by a two-shift system. And with class sizes of 45 to 48 Mrs Nabahin says "each girl does not get the right to express herself and the teacher is unable to follow up with each child".

Despite its chronic shortage of resources in the face of ever rising demand UNRWA is making valiant steps to alleviate the crisis. This includes replacing automatic end-of-year upgrades with remedial classes like the one at Al Deraj, limiting class sizes for boys – whose results are worse than for girls – to 30, building a new teacher training college, running extra classes in Arabic and maths, and hiring 1,500 new teachers' assistants across the Strip. "The cumulative impact of years of violence, and closures, of disrupted schooling and endemic poverty is clear from the stark exam results," says John Ging, UNRWA's operations director in Gaza, adding that despite all the challenges "we are determined to ensure that our reforms and our drive to excellence in UNRWA schools will be successful".

It will be an uphill struggle, especially while the isolation imposed on Gaza by the international community and Israel continues. It's hard to over-estimate the impact on a generation of Gaza schoolchildren whom UNRWA spokesman Chris Gunness says are being "bred in despair". He adds: "We risk radicalising people who show every sign of wanting only a measure of prosperity and dignity".