We were in east Jerusalem, the day before we were due in the Jordan Valley to document the plight of Palestinian farmers, when the man from Oxfam burst in to the room. This was last week, when I spent five days in the occupied territories – Gaza, Hebron, the Jordan Valley and Bethlehem – inspecting living conditions in anticipation of President George Bush’s visit to Israel today. I’ll get back to the utter hopelessness of the situation in a moment, the misery, the intractable mess – all man-made – the power cuts, the wall, and the things that are festering behind it.

But first, the inconsistencies: the obsession with “narrative”: the utter impossibility of saying anything without being crushed, ridiculed, accused of racism, antiSemitism, Islamophobia, ignorance, brainwashing or lying. This from the Left, the Right, the Jewish lobby, the Muslim lobby, NGOs, evangelical Jew-loving Christians from America, radical Jew-hat-ing Muslims from the Middle East, the Israeli lobby.

If there are any generally accepted facts about the region they are these: the fate of the Palestinians and the disputed territories are an infinite generator of fear and hatred: politically speaking it is the crucial conflict in the world that won’t be solved any time soon. Being there, on the ground, is soul crushingly demoralising. Walk through enough rubble and military checkpoints and in a matter of days you become aware of the possibility of feeling nothing at all.

Anyway, the man from Oxfam wanted to know about the Times photographer: “Where’s he from?” in particular. “He’s from Israel,” I said. “He’s Israeli.” “Do you know what . . . part of Israel?” the man from Oxfam asked nervously, pointing at a map on the wall to show me where the Timesphotographer was allowed to be from and where he wasn’t. “It’s just that a member of staff seemed to think he might be from one of the settlements.”

It became clear that I was expected to call the Israeli photographer and interrogate him about his roots: because if he turned out to have been an Israeli settler and, further, the angry and destitute Palestinian farmers got wind of this fact, or, indeed, if he looked or sounded as if he might have been a settler, Oxfam’s hard work bringing fresh water to a village beset by artificial drought would go out of the window. I dialled, the photographer picked up, awkwardly I explained the situation and immediately he began to shout: “You can tell them to f*** off,” he screamed. “F*** off! I’m Left! I voted for the peace process! I even look like a f***ing Palestinian.” The photographer swore furiously some more, fired himself from the job, told me that if it was up to them the Palestinians would only hire among themselves, and hung up.

The next day we visited the decimated Palestinian villages of Beit Hasan and Bardala, with a replacement. This photographer was from more acceptable territory as far as most Palestinians are concerned – west Jerusalem – but was, nevertheless, an Israeli of nonPalestinian appearance. Next to me in the car was Barbara Stocking, the head of Oxfam, who believes that “Palestinian suffering will only end if there is an end to occupation”. Stocking’s organisation is well known in Palestinian communities, but few Israelis have ever heard of it. Palestinians have received billions of dollars in aid since the Oslo Agreement in 1993. Could aid be part of the problem? It is Stocking’s view that “at Oxfam we think it is everybody’s right to have access to water”.

On our way south we drove on roads accessible only to Israelis and saw Palestinian land that had, as a result, become inaccessible to the farmers who lived on the wrong side of it. We saw Jewish settlements flourishing and surrounded by protective barbed wire.

The people from Oxfam ran through the statistics: the World Bank estimates that between 1999 and 2006, Palestinian gross domestic product per head fell by 40 per cent to $1,130, and 80 per cent of Palestinians are now thought to be dependent on aid. Unemployment is 40 per cent. The only answer to this is an end to Israeli occupation, says Oxfam, but the West Bank separation barrier – the wall that is interpreted either as an effective antiterrorist measure or a covert means for Israel to annex land from the Palestinians, depending on where you stand in this vastly complex debate – is growing at lightning speed and separating Palestinians from their livelihoods. The West Bank is described by the World Bank as a “shattered economic space”. Gaza? Since Hamas seized control of the territory and the area was blockaded, it can hardly be considered an economic space at all.

Worse than the smell of poverty is the look on the faces of the poor when they are forced, through destitution, into abject gratitude to their benefactors. In the Jordan Valley, Palestinian villagers explained how the Israelis had reduced their water supply and how, only with Oxfam’s help, they had managed to survive the past 12 months. We talked to a local farmer who boasted of European-standard organic tomatoes, thanks to a crop-saving donation of plastic sheeting, but we doubted that the tomatoes would ever travel beyond the local market. I sat there as the village council pleaded with Oxfam for more aid, having long ago come to terms with the humiliation of having to do so.

And when it all ended our photographer took me to one side and said: “This thing about the water – I’m sure Israeli farmers have to ration their water too.”

Everywhere you go in the region you are lobbied. Already on the El Al flight to Tel Aviv, Ben on my right was saying: “If you want to write this article I suggest you begin in 586BC with the Babylonian exile,” and complained about the pro-Pal-estinian bias of the BBC. Julian on my left was saying: “This whole thing comes down to an excess of testosterone,” then told me the story of when he quit the British Army because he was getting too much of a buzz from shooting people.

In west Jerusalem, a man from the foreign press department of the Israeli Government pressed a folder into my hand. Watching the Watchers is sponsored by an organisation called NGO Monitor, and argues that “the NGO exploitation of the rhetoric of human rights in order to attack Israel, their use of double standards, and the consistent absence of credibility in their reports, have eroded and essentially destroyed the core universality of this moral framework”. More leaflets followed, from Left and Right – a suitcaseful: Deleting Gaza’s Economy From the Map, The Torture and Ill-treatment of Palestinian Detainees, Israel’s Separation Policy and Forced Eviction of Palestinians from the Centre of Hebron.

A tipsy humanitarian worker told me: “There would be no terrorism if the Palestinians got their land.” A Christian missionary told me: “Palestinians must stop being victims.” A man high up in Palestinian political circles, if such a thing still exists, told me: “George Bush is the mirror image of Osama bin Laden.” A volunteer from another humanitarian organisation showed me footage of a settler woman in Hebron taunting a Palestinian woman in front of motionless Israeli soldiers. “You’re a whore,” she says. “And your daughter is a whore too.” When the volunteer drove me to Hebron to show me the “cage house” where a Palestinian family live behind bars for protection from violent settlers, Israeli soldiers refused us entry and she became embroiled in a 15-minute debate about civil liberties.

Later that day the man from the Israeli Government e-mailed me a link to a study which finds that: “The NGO use of classic antiSemitic themes such as the blood libel are found in Oxfam’s poster in 2002 of the ‘Israeli orange’, which promoted boycotting of Israeli products, and of Israel in general.” The few feeble attempts to establish a functioning Palestinian economy are nipped in the bud, even if they involve major investments from countries such as Britain. The Gaza Marine Field, an offshore gas reserve, is believed to contain natural gas worth about £2 billion, and it was expected to bolster the local economy after the British multinational BG Group bought the rights for commercial exploitation. After top-level talks between the British and the Israeli side, including Gordon Brown when he was Chancellor, as well as an investment in excess of £60 million on behalf of BG Group, the project has not yet moved from scratch because of Israeli opposition based on concern that revenues might end up in the hands of Hamas, as well as legal challenges from Israeli gas companies.

The UN says it is this close to having a humanitarian crisis on its hands. It may be politically incorrect to compare the Eres crossing into Gaza to a vast labyrinthine decontamination unit, but that’s what it felt like. At the other end of it, in Gaza, your first view is a panorama of rubble, the remnants of bombed-out factories. Your first thought, as a Western journalist, is will I be abducted (just as your last thought on exiting is, will I be accidentally shot by an Israeli border guard?). Your second thought is, how did it get so bad? And where are the Palestinian allies?

One despondent man told me he used to export strawberries: now his business is finished. “We have no friends around the world. The world exploits us. Even suicide bombers from abroad, they try and blow themselves up in our name, but they don’t think about what this does to us, the ordinary people who can’t even find food to eat.”

The Oxfam staff talked ebulliently about their kitchen gardens project, which is aimed at promoting self-sufficiency among some of the residents. The Palestinians hate their rulers and speak bitterly about Yassir Arafat’s widow living in splendour in Paris. “I hope the British will come and help us,” one told me. “They’re why we’re in this situation now.” Two things have happened since the death of Arafat: Palestinians have no central government and their leaders are corrupt and chaotic. Israelis continue to build walls and expand the settlements.

And symbolic of all of this is the wall. Oxfam says the barrier/wall costs Palestinians 2 to 3 per cent of GDP a year. Wherever you go you are followed by the wall, stalked by the wall: look around, there it is behind you or in front of you or beside you, often with another complementary wall running along behind it.

In this beautiful part of the world it is very grey, as if the pavement has risen up perpendicular to the soil, like fallen gravestones that have righted themselves overnight. Some walls are painted with trompe-l’oeils of false landscapes, but all are garlanded with barbed wire and bombs. In Bethlehem I met families driven crazy by the wall that now encircles their houses and cripples their businesses.

Moshe Dayan, the Israeli general and statesman, once famously told Palestinian refugees: “You shall continue to live like dogs, and whoever wishes may leave.” Here are people living like dogs, but they are fenced in, they can’t leave.

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