JERUSALEM — Claims that the economy in the West Bank is flourishing overlook rising unemployment and a jump in inflation that has decreased purchasing power, a United Nations report said on Wednesday.

In recent months, observers and officials including Israeli Prime Minister Benjamin Netanyahu have described the West Bank's economy as booming, calling it a sign of positive momentum under Palestinian president Mahmud Abbas.

But UNRWA, which assists Palestinian refugees, said on Wednesday that private sector growth and economic expansion were accompanied by an increase in unemployment and rising inflation that were hurting average Palestinians.

The report said the unemployment rate in the West Bank stood at 25 percent in the second half of 2010, up from 23.5 percent in 2009.

For Palestinians in the West Bank classed as refugees, the unemployment rate was even higher, standing at 27.9 percent, according to the report.

And it said that rising consumer inflation, which stood at 2.3 percent in the second half of 2010, caused "a further slide in the purchasing power of wage incomes" among Palestinians in the West Bank.

The agency said the figures provided a stark counterpoint to claims of an economic boom in the West Bank.

During his address to the US Congress last month, Netanyahu said there had been "remarkable" growth in the Palestinian economy, in part due to Israel's decision to remove checkpoints and restrictions on movement.

UNRWA, however, said such claims ignored deep economic problems that showed no signs of improvement.

"The economic good news that the media have made much of in recent months overlooks deeper processes underway," said UNRWA spokesman Chris Gunness.

"The occupation and its related infrastructure, such as settlements and settler-only roads that encroach on and divide Palestinian land, settler violence and the West Bank barrier have diminished prospects for Palestinians in general and especially for refugees."

Annual growth of the Palestinian economy was estimated to have reached 9.3 percent in 2010, exceeding the PA?s projections of 8.0 percent, according to data from the World Bank, which added in its latest report that the growth "did not appear to be sustainable".