Almost all of Gaza's turbulent story is bound up with Jamil Abu Hmaideh's strawberry fields here in the far north of the strip. Between two wispy clouds high in the blue sky above us, two Israeli Apache helicopters hover on the look-out for the Qassam rocket-launching crews as we bite into the luscious, perfectly ripened fruit Mr Hmaideh has picked for us. At the end of the neat plantation rows are the high sandbanks just inside the Gaza town of Beit Lahiya's border with Israel, the ones from which the military bulldozers descended when they last ploughed up one of his fields before he started planting at the end of August. Hanging on the wall in his two-room farm station is a "martyr portrait" of his 21-year-old son, Nael, who was killed in May, a non-combatant casualty of the savage infighting between Fatah and Hamas.

But what is preoccupying Mr Hmaideh as he surveys his three acres of strawberry plants in this isolated and often dangerous place is another peculiarly Gazan tragedy, a function of the absolute economic and commercial blockade to which it has been subjected by the total closure by Israel of the main cargo crossing at Karni since June, after Hamas seized control of the Strip. His entire crop of low-insecticide, high-quality fruit, scheduled for export from this very weekend across the border into Israel and beyond, much of it en route to upscale retailers in Europe, would normally fetch him the £3-£4 per kilogram he needs to break even let alone make a modest profit. This year it is destined at best to be sold at a loss he cannot possibly sustain – for 25p or less in what promises to be a saturated as well as impoverished local market.

Much of it will rot; for the Karni closure also means he cannot import the extra plastic sheeting he needs to protect the strawberries from the rains due any day now, or the winter frosts a matter of weeks away. Mr Hmaideh, who borrowed more than £13,000 in plantation costs before the season, will simply go bust. The 8,000 families employed in Gaza's production of strawberries, cherry tomatoes and carnations, the bumper crop of which has already started to be destroyed instead of being sent to the Dutch auction houses for which it was planted, will lose their modest income. Instead, this proud farmer says with a tinge of contempt in his voice, he and they will be just left "to go to the UN and collect food coupons".

Mr Hmaideh is a leading member of the Beit Lahiya farmers' cooperative which has written to the United States, whose agency USAID ironically supplied much of its new refrigeration and washing equipment, to the UN, and to Tony Blair, who is due back in Jerusalem next week and was appointed by the international Quartet to propose ways of reviving the Palestinian economy, begging for help. Their letter warns that if the Palestinian farmers lose their place in the European market this year they will probably lose it for good to stiff competition from Spain and Egypt. And the co-operative points out that their partners are Israeli companies which are also losing out – including the big and partly state owned Agresco, which markets the strawberries and which the farmers say have also vainly pressed for a solution.

Maxime Verhagen, the Foreign Minister of the Netherlands, which lent the Gaza co-operatives – and was paid back – ¿4.3m last year to help incentivise the carnation and strawberry farmers, and enjoys warm relations with Israel, has written to its government to press for ways to be found to open the crossing. But so far Israel, with for what largely remains the public acquiescence of much of the international community – and, some diplomats and Gaza businessmen hint, that of Mahmoud Abbas's emergency West Bank government in Ramallah – has stood firm. All the more so since the Israeli cabinet declared Gaza a "hostile entity" last month.

"I am not Fatah, I am not Hamas," says Mr Hmaideh. "I am a farmer. They should pay condolences in the farmers' houses because we built this market with our blood and if I lose this market I lose my life. How are we going to get these markets back if the Dutch and other Europeans are left waiting for our products?"

He blames Fatah and Hamas for the bloody infighting which ended in Hamas's military seizure of Gaza in June. But because like every Gazan he knows his politics he also blames the international Quartet that ratified the agreement brokered in November 2005 by Condoleezza Rice, which was supposed to keep Karni open for trade, and which even before June was honoured as much in the breach as in the observance. "They were the ones who said they would guarantee to keep the crossing open."

He has thought, too, about the long-term effects of the collapse of the family business in which his wife and children work. "I have 12 children," he says, "and now I can keep control of them. But how can I do that if I am not offering them what I am offering now? They won't listen to me. Perhaps they will become terrorists in the future."

Ahmad Shafi, the director of the co-operative and a retired headmaster who grows strawberries on a small plot here, agrees. "If there are no exports there will be many problems here, social problems, poverty."

Mr Shafi explains the history of strawberries – "the best in all Palestine" in Beit Lahiya, where the mix of sandy and clay soil, the climate, the professionalism of the growers and above all the "sweet water" from the local wells, which is in stark contrast to the brackish, salty and polluted supply in much of the rest of Gaza, make conditions ideal for fruit growing. Before the Six Day War he says all northern Gaza was especially famous for its citrus plantations. "They used to call it the yellow gold." But then in 1968, the newly occupying Israel, itself a major citrus producer, encouraged the Gaza farmers to grow strawberries and flowers. The orange groves have remained here and in neighbouring Beit Hanoun, of course, but with the two intifadas – and particular the second which started in September 2000 – the Israeli forces began to bulldoze the groves on the grounds they afforded cover to militants. "Today we're not allowed to plant citrus because of security reasons so what is a farmer going to do? He will plant vegetables or fruit. Now there are more and more farmers planting strawberries."

Mr Shafi, who has a prized businessman's permit that makes him one of the few Gazans still allowed to travel to the West Bank or Israel, has used it tirelessly to argue the farmers' case in Tel Aviv, Jerusalem and Ramallah. He has pointed out that this is a low-margin industry – the strawberry planting costs are $7.8m (£3.8m) compared with potential revenue of $9.8m (two-thirds from exports) – and that the loss of any, let alone all, of the market is catastrophic. He argues too that because of its partnership with the Israeli wholesalers, Gazan agriculture is actually – until now – a rare beacon of co-existence. "The Israelis and Palestinians are neighbours. We are farmers on the land and we have to co-exist and co-operate." The tragedy is compounded in that the orthodox religious market in Israel is crying out for Arab-produced fruit this year because it is the Shmita – the once every seven year biblical requirement that Jews should not eat food produced by fellow-Jews.

What is unclear is how far the Ramallah government set up in June by Mr Abbas, who again called for Hamas's overthrow in Gaza yesterday, has itself pressed Israel to open Karni. "They keep telling us it is a very high priority for them and they are continually raising it," said one European diplomat intimately involved in discussions on the issue. "But there seems to be some discrepancy with what happens." Asked about his own discussions with officials in Ramallah, Mr Shafi smiles wanly and says: "They tell us there will be more meetings."

But there is no doubt that Israel remains opposed to reopening the crossing as long as militants continue to fire Qassams into Israel and Hamas remains in control of Gaza. Mark Regev, the Foreign Ministry spokesman, says there continue to be "nihilistic" attacks on the crossing itself. Yet last year, when there was bloody conflict in Gaza – including the frequent firing of Qassams –and despite the difficulties of Karni repeatedly closing down on security grounds, the Beit Lahiya farmers managed to get most of their crop out and most of the supplies they needed, in.

The Dutch government has assured Israel that Palestinian security guards trained by them are ready and waiting to secure the crossing itself. And the Rice-brokered agreement in 2005 was anyway specifically supposed to survive such security crises. Mr Regev said that the difference now is that Hamas is in control of Gaza. "The Palestinians cannot expect business as usual as long as their main export continues to be rockets and mortars into Israel," he said. The farmers, of course, are powerless to affect the Qassams. "We have tried to stop them," Mr Shafi says. "We don't even know who they are."

But beyond that a World Bank report prepared for international donors in September starkly warned that current closures contribute to a "confluence of policies that combine to stunt the prospects of self-sufficiency". And in a passage explicitly expressing concern about the Qassams, it nevertheless went on to quote with approval a June speech by Ed Balls, then Economic Secretary to the British Treasury, saying that "a viable economic roadmap will not be possible unless a better balance can be struck between short-term security on one hand and on allowing movement and access on the other, necessary to promote both security and prosperity for the medium term."

The bank's report, warning of just the collapse Gaza is now seeing, with many tens of thousands workers laid off by the total shutdown of Gaza industry, warned rather like Mr Hmaideh himself, that 50 per cent of Gaza's population is under 15 and would soon "be thrust into a barely existent labour market".

The UN Relief Works Agency, Unrwa, which is responsible for more than half the Palestinian population who are refugees, has recently expressed strong concerns that the closures and international boycott are actively increasing extremism in Gaza.

"This is another tragedy in a long catalogue," said Unrwa's spokesman, Chris Gunness, yesterday. "That the economic collapse is increasing the sense of desperation and isolation of the people and the radicalisation of the most densely populated part of the planet serves no one's interests."

Next week Mr Gunness's senior Unrwa colleague, John Ging, the agency's director of operations in Gaza, will address MPs in London on the crisis. His title, plucking directly the phrase used by Israel's cabinet last month, is pregnant. "Hostile Entity – self fulfilling prophecy?"