Gaza in the hands of Hamas, with masked militants sitting in the president's chair; the West Bank on the edge; Israeli army camps hastily assembled in the Golan Heights; a spy satellite over Iran and Syria; war with Hezbollah a hair trigger away; a scandal-plagued political class facing a total loss of public faith. At a glance, things aren't going well for Israel. But here's a puzzle: Why, in the midst of such chaos and carnage, is the Israeli economy booming like it's 1999, with a roaring stock market and growth rates nearing China's?

The text that follows is from the newsletter (No 68) issued by MP Andrew Slaughter (Labour Party) that summarizes his meeting with Dr Mustafa Barghouti (founder in 1979, of the Union of Palestinian Medical Relief Committees). With other MPs from the Britain-Palestine Group I met Dr Mustafa Barghouhi on Monday. Dr Barghouthi is a member of the Palestinian Parliament not affiliated to Hamas or Fatah, and was runner-up to Mahmoud Abbas in the 2005 presidential Election. He’s recently appeared on The Daily Show and Hardtalk and is one of the most erudite and effective Palestinian politicians. Here’s what he told us.