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Israel's restrictions and rising fiscal constraints in the Palestinian territories are severely impacting the economic conditions of Palestinians and hindering their access to timely life-saving healthcare, the World Bank said Monday.

In a report titled "Racing Against Time", the World Bank said that overall the Palestinian economy was performing below potential, with per capita income expected to stagnate.

Poverty in the Palestinian territories was on the rise, with one out of four Palestinians living below the poverty line, the Washington-based global lender said.

Israel's restrictions on movement and trade in the occupied West Bank, the blockade imposed on the Gaza Strip and the divide between the two Palestinian territories were among several factors that had put the Palestinian economy at high risk, the report said.

"The fiscal constraints weigh heavily on the Palestinian health system and particularly on its ability to cope with the mounting burden of non-communicable diseases," Stefan Emblad, the World Bank's director for the West Bank and Gaza, said in a statement released with the report.

The restrictions, including "a lengthy, bureaucratic regime of permits", often makes it hard to provide timely life-saving healthcare to Palestinians, he said.

Access to outside medical referrals for treatment of cancers, heart diseases, and maternal and child birth conditions are significantly affected due to physical and administrative constraints, the statement said.

"The situation is particularly critical in Gaza, which suffers from a more limited health system capacity and where patients struggle to get needed medical exit permit applications on a timely basis," it said.

"Research figures show that the near-blockade of Gaza has had an impact on mortality, as some patients do not outlive the length of the permit process."

Thousands of Palestinians from the West Bank and Gaza Strip cross annually into Israel for medical treatment unavailable in the impoverished Palestinian territories.

Israel has occupied the West Bank - now home to some three million Palestinians - since the 1967 Six-Day War, when it also seized the Gaza Strip, the densely populated coastal enclave it has since withdrawn from.

Last year, Israel issued entry permits for more than 110,000 medical visits for West Bank residents, according to COGAT, the Israeli defence ministry body overseeing civilian affairs in the Palestinian territories.

More than 17,000 such permits were issued during the same period to Palestinians from Gaza, where 2.3 million people live.

A blockade imposed by Israel since the Islamist movement Hamas rose to power in 2007 has also obstructed medical supplies to the enclave.

The World Bank urged Israel and Palestinian authorities to better manage such medical cases and ease the permit process in a bid to provide timely healthcare assistance to patients and their companions.

Overall the Palestinian economy has been stagnating for the past five years, Emblad said, adding it was not expected to improve unless policies on the ground change.

"Given population growth trends, income per capita is thus expected to stagnate," the World Bank said.