"Action needs to be taken now if Gaza is to be a liveable place in 2020 and it is already difficult now," UN humanitarian coordinator Maxwell Gaylard told journalists when the report was released on Monday.
Five years into an Israeli blockade supported by Egypt, and living under one-party rule, Gaza's population of 1.6 million is set to rise by 500,000 over the next eight years, say the authors of the UN's most wide-ranging report on the territory.
Gaza has one the youngest populations in the world, with 51 percent of people under the age of 18.
"Action needs to be taken right now on fundamental aspects of life: water sanitation, electricity, education, health and other aspects," Gaylard said.
Since 2007, Gaza has been under the control of the Islamist Hamas organization, an armed political movement which rejects permanent peace with Israel. They fought a three-week war in January 2009, and Israel is resisting international pressure to lift its blockade, which it says prevents arms reaching Hamas.
Gaza has no airport and no sea port. The border is tense, with frequent clashes over rocket or mortar fire from Gaza and air strikes by Israel. Gaza rockets hit Israeli land on Sunday, damaging a factory in the town of Sderot, east of the enclave.
Israel partly eased restrictions in mid-2010, and Gaza's crippled economy began to revive from rock bottom. Real GDP is estimated to have risen by 28 percent in the first half of 2011 as unemployment fell to 28 percent in 2011 from 37 percent.
But the report, involving expertise from more UN agencies and making projections further into the future than before, said growth over the next eight years would be slow, since Gaza's current isolation renders its economy essentially non-viable.Reconstruction but no peace
The people in the narrow coastal strip live mainly on UN aid, foreign funding and a tunnel economy which brings in food, construction materials, electronics and cars from Egypt.
But the smuggling trade is no solution. Robert Turner, director of operations of the United Nations Relief and Works Agency , said Gaza by 2020 will need 440 more schools, 800 more hospital beds and over a 1,000 additional doctors.
Gaylard called on international donors to increase their aid to a population which is 80 percent aid dependent.
"Despite their best efforts the Palestinians in Gaza still need help," he said. "They are under blockade. They are under occupation and they need our help both politically and practically on the ground."
Israel in fact withdrew from Gaza in 2005, removing troops and settlers after 38 years of occupation.
A lack of clean drinking water is the greatest immediate concern, said Jean Gough of the UNICEF. The report projects a 60 percent increase in the enclave's water needs, while urgent action is already needed to protect existing water resources.
By 2016, Gaza's aquifer may become unusable, she said. Palestinians are already drilling deeper and deeper to reach groundwater and there is a need for more desalination plants. A seawater plant costing about $350 million is planned.
The UN says only a quarter of Gaza waste water is treated. The rest, including raw sewage, goes into the Mediterranean Sea.
Gaylard said Gaza needs peace and security to improve the lives of its people. "It will certainly have to mean the end of blockade, the end of isolation and the end of conflict."
There is as yet no sign of an end to the conflict between Hamas and Israel. The Islamist movement is shunned by the West as a terror organization and there is no prospect of diplomatic contacts leading to peace talks as long as Hamas rejects Israel's right to exist.
Analysts say much may depend on the future of relations with the new Egypt, whose Islamist leaders are sympathetic to Hamas but also committed to the 1979 peace treaty with Israel. Hamas is also supported by Iran, which is extremely hostile to Israel.
Aside from its tunnel network, Gaza imports via Israel. UN figures show, for example, that 46,500 tonnes of building materials came into Gaza via the Kerem Shalom crossing from Israel in September 2011, while 90,000 tonnes came via the tunnels.
It also gets electricity and fuel from Israel.
Rebuilding homes and factories smashed in the winter war of 2009 is Gaza's biggest task, and construction is the source of most of its growth in employment in the past two years.
GAZA CITY (Reuters) -- Gaza will no longer be "liveable" by 2020 unless urgent action is taken to improve water supply, power, health, and schooling, the United Nations' most comprehensive report on the Palestinian enclave said on Monday.