High above the pot-holed streets, donkey carts and militant graffiti that have come to define the besieged Gaza Strip sits Rosy, the territory's only spa and a refuge for its unlikely upper crust.

The spa's luxurious setting and its upscale clientele stand in stark contrast to the poverty gripping the war-battered Palestinian territory of 1.5 million people, the vast majority of whom rely on foreign aid.

"We have the highest quality services in the region," says Mohammed Faris, who launched the spa with his British wife in 1999.

"We had one customer, a woman who worked as an EU (European Union) advisor. She went to New York and called me from there and said she missed Rosy," he says as he smokes in casual defiance of the daytime abstinence practised by the observant during the Muslim fasting month of Ramadan.

The spa is a sign of how, despite a two-year blockade maintained by Israel and Egypt, a reasonably well-off minority has found a way to endure amid Gaza's bleak landscape of toxic politics and economic paralysis.

A handful of upscale restaurants and hotels still serve lavish meals and fragrant waterpipes to businessmen, landowners, aid workers, journalists and even the occasional senior Hamas official.

Since the Islamist movement overran Gaza in June 2007, Israel and Egypt have sealed its borders, allowing in only basic goods in a bid to put pressure on the group, which is pledged to the destruction of the Jewish state.

But a thriving trade through tunnels beneath the border with Egypt has brought untold wealth to a new class of smugglers and hundreds of thousands of dollars in tax revenues to the Hamas-run government, which regulates the trade.

Meanwhile, above-ground businessmen like Faris -- through ingenuity and a network of international contacts -- have maintained their relative affluence.

Faris says he prefers not to use the tunnels, instead relying on friends -- journalists, diplomats and international aid workers -- who bring in beauty products and other necessities in their hand luggage.

It is not easy and, like nearly everyone else in Gaza, Faris fears for the future. Earlier this month he limited his spa to women because he could not bring in enough customers during men-only hours.

"If I want to expand, I can't. If I want to sell, I can't. I'm stuck," he says. "You are wasting your time, wasting money, wasting electricity and you don't make enough money to do anything."

The spa offers a full range of amenities -- a steam room, a sauna, a small gym and a beauty parlour. There used to be a Jacuzzi, but Faris had to drain it in 2006 because he could not import the right filters.

A facial runs from 20 to 75 dollars (15 to 50 euros), a one-hour massage is around 40 dollars and a monthly gym membership is around 35 dollars -- small fortunes in a place where most people make less than 15 dollars a day.

Rosy's client base, like Gaza's middle and upper class as a whole, is largely an outgrowth of the political conflicts gripping the territory.

At the top of the pyramid are the international and local staff of UN agencies, aid organisations and human rights groups, and the journalists who cross in and out through Israel's Erez crossing on a daily basis.

Then there are the civil servants who work for the Hamas-run government -- around 20,000 doctors, teachers and other government workers who get regular monthly wages.

And there are the 70,000 employees of the Western-backed Palestinian Authority (PA) based in the West Bank who -- because of the internal political rivalry -- are paid to stay home and boycott Hamas.

"When they told us to stop going to work, I had a lot more free time, so I decided to spend some of it on sports," says Dana Khaled, 26, who is employed by the finance ministry, during a recent workout.

Added to the absurdity of being paid not to work is the irony that PA employees enjoy what is essentially an open-ended paid holiday but are not allowed to travel anywhere.

"People have started exercising more since the blockade, because it is impossible to travel outside Gaza to get a breath of fresh air," says Safaa, a 30-year-old housewife, who declined to give her last name.

It may seem wasteful, but the PA salaries -- mostly funded by international donors -- provide a vital lifeline to Gaza's besieged economy.

"Without those wages they would be dead," Faris says. "It's a little straw in our throats that they use to feed us."

Virtually everyone else in Gaza is poor, according to a report published by a UN think-tank last week, which found that 90 percent of Gaza's 1.5 million residents live below the poverty line.

The UN Conference on Trade and Development's (UNCTAD) assistance programme for the Palestinians found that the Israeli offensive on Gaza at the turn of the year caused four billion dollars worth of losses to the local economy.

The three-week war left more than 1,400 Palestinians and 13 Israelis dead before it came to a halt on January 18, and entire neighbourhoods on the outskirts of Gaza City were reduced to rubble.

The spa closed during the war but, after the dust cleared, Faris opened its doors once again.

"After the war I wasn't expecting anyone to come and then I got massive business... The women come to relax, to feel pretty, to feel better."