FADEL DARDAR stares with weary gloom at the wreck of his orange grove. "They used to bring us $3000 a year - just the trees in this one field. Now they're worth nothing, less than nothing."

It's early spring in Gaza, but most of the 100 or so trees have lost their leaves - and the few that remain are brown and brittle. Bizarrely, hundreds of ripe oranges still hang on the branches, but just as many of the fruit are rotting in the stinking, muddy ground.

"The oranges are poisoned, the trees are poisoned and so is the land," says Dardar. He's 26, and needs to sell oranges to feed his family, including his three small children. "I don't know what we're going to do," he says quietly.

All around us is a sharp, sweet scent; the smell of fermenting, rotten oranges undercut with a thicker, more cloying smell - semi-treated sewage. This is what has tainted the Dardar family's fields.

This is a study in knock-on effects. It began last June, when Israel imposed an economic shutdown on the Gaza Strip, in a bid to bring pressure on the militant Hamas government to cease its attacks on Israel. Many call what has happened since a "siege" - and this does not seem an exaggeration. All but a few Palestinians are unable to enter or leave Gaza, even those needing medical care. As a result, 80,000 have lost their jobs. The flow of supplies - and almost everything in Gaza comes from Israel - is severely limited, and there are shortages of everything from fuel and cement to school books and basic medicines.

Because Israel won't allow spare parts into Gaza, the Strip's antiquated sewage system, built to serve just a fraction of the 1.5 million people who now live there, is near to total collapse. It is kept working by pumps, which remove excess sewage and dump it straight into landfill sites or the sea. But Israel has cut back on electricity and fuel supplies too, so the pumps don't always work. And that's when the sewage rises in the streets of Zaytoun, where Dardar's family lives and farms.

"It's pretty obvious what's happening," says Dardar's neighbour, Omar Abbas, who lives next to the sewage plant. "When the electricity cuts out, which it does most days, an hour later the sewage starts to rise through the manholes."

He points to an open drain, brimming with a virulent green liquid. "And the dirty water flows down the roads and into the fields." His wife shows us the tide mark where sewage and floodwater rose knee-high inside her yard last week. Her kitchen garden was ruined. "If you'd seen it, you'd have torn your hair."

As we walk around we see empty greenhouses where tomatoes should be growing, and fields with intricate irrigation systems. Some are full of young potato plants; they look healthy enough, but officials have told the farmers they can't eat the potatoes or sell them - it's too dangerous.

In the smelly, muddy streets children are playing - a man drives a donkey cart through a sewage-laced puddle, splashing them. A mother tells me all her children have diarrhoea and skin diseases.

Aided by Oxfam engineers, Gaza's water authorities worked all winter to keep the sewage treatment system functioning. For most of that time they had only 50% of the fuel they would normally use. But despite their efforts, they are beginning to admit the battle is lost. Plans to restore the walls of a major sewage lake at Beit Lahia, backed by Tony Blair, were stuck for most of the winter because of Israel's intransigence over the movement of cement.

Oxfam's engineers back the Gaza authorities who say that, if the emergency pumps fail - and there are no spare parts left - the lake will overflow, and there will be a catastrophic collapse of the sewage system. It will send 1.5m tonnes of sewage into northern Gaza City, putting at least 10,000 people at risk.

In some areas, sewage has flowed into schools, and many residents have had to temporarily abandon the lower floors of their homes. Raw sewage is being pumped into ponds and the sea, threatening the ecology of the coast. Urgent appeals have also been broadcast for all drinking water to be boiled.One of Oxfam's health workers told me: "This winter we've seen levels of water-borne disease among children that are normal for high summer - sometimes 70%-90% of the cases being treated are bloody diarrhoea' or parasites like giardia. We are very worried about what the hot months will bring."

But even if the siege is lifted, and the sewage system repaired, the damage done to the market gardens of Zaytoun will not be undone. Or to the people who made a living from them. In one of Fadel Dardar's orange groves, six men are sitting under the trees. They were all construction workers - they had good jobs in Israel until the border was shut last June. Without income, in the autumn they had an idea: they pooled their money to rent an orange tree plantation from Dardar.

THEY had high hopes: Gaza's oranges are famous for their high quality, and Dardar's fields were particularly productive. Every tree would yield up to eight boxes of fruit, which could sell in Jordan or Saudi Arabia for £2.50 a box. Even with the borders closed and exports impossible, the oranges should have sold in Gaza's markets for half that. But then the sewage floods came.

"There are 13 in my family," says one of the men, Ahmad Elnebih. "I am the only worker. Now my life is in the hands of UNRWA (the UN agency that delivers food aid to 80% of Gazans)". Another man seems close to tears. "Look at us! Our life is dying. The trees are dying. Everything is dying," he says.

Oxfam is starting a food voucher scheme in Zaytoun, to try to help the farming families. But addressing the people's real needs - their lack of jobs, their fears for the future - will take political drive that the world outside Gaza seems to lack. Even the special envoy for the quartet group of nations overseeing the peace process, Tony Blair, seems to have given up - he's now taken on another job, tackling climate change. The International Crisis Group (ICG) last week reported that the peace process was failing. "The policy of isolating Hamas and sanctioning Gaza is bankrupt and, by all conceivable measures, has backfired," it stated. "Violence is rising, harming both Gazans and Israelis. Economic conditions are ruinous, generating anger and despair."

Ask the orange farmers how things can move forward and they shrug. "Everything has stopped for us," says Ahmad El-Nebih, 46. "What can we do? Have an election? That won't change anything. You must ask people outside here to find a way so we can start our lives again. Think of us, and don't give up."

What do the organisations who work with the ordinary people of Gaza want? "An end to violence targeted at civilians and an end to the blockade of Gaza so that people in Gaza and in neighbouring Israeli towns can get back to normal lives free of fear and poverty," says Oxfam's Michael Bailey in Jerusalem.

Or what? Many observers predict war in Gaza, or total social collapse, if things don't change soon. "The worst is not yet inevitable," says Robert Malley, director of the ICG's Middle East and North Africa programme. "But avoiding it depends on Fatah and Hamas the opposed ruling factions in the Palestinian territories beginning the process of reconciliation; a ceasefire agreement that allows Gazans and Israelis near the border to pursue normal lives; and the international community at last playing a constructive part in encouraging the parties to achieve these goals."