The Palestinian economy has suffered during the intifada

The agency set up the aid programmes as temporary measures 18 months ago and cannot maintain them indefinitely, spokesman Florian Westphal said.

The Palestinian economy has suffered severely under measures which Israel says are vital for its security.

Mr Westphal urged Israel "to enable the Palestinians to take care of their own livelihood".

"Humanitarian assistance cannot replace a long-term solution," he told BBC News Online.

He said the rural relief programme and the urban voucher programme - which were established in June 2002 - were never intended to continue permanently.

"This kind of assistance is appropriate to an emergency situation, but this is now a prolonged economic crisis," he said.

Violence

The Red Cross announcement came as Israeli soldiers killed a 22-year-old man in the West Bank town of Tulkarm.

RED CROSS PROGRAMMES Rural relief: Food, sports kits, school supplies and hygiene parcels to about 30,000 families Urban voucher: Coupons worth $90/month for essential goods to almost 20,000 families Source: ICRC website

Israeli sources described the man, Youssef Taleb, as a Hamas militant and said he had opened fire on Israeli forces.

Also on Monday, an Egyptian envoy met Palestinian leaders in an effort to broker a truce to halt three years of violence between Israelis and Palestinians.

Egyptian intelligence chief Omar Suleiman, who helped secure a short-lived ceasefire earlier this year, met Palestinian leader Yasser Arafat and Prime Minister Ahmed Qurei for more than an hour on Monday.

Closures

Mr Westphal said the last deliveries under the International Committee of the Red Cross rural relief programme and urban voucher programme would take place this week.

The ICRC cannot substitute itself for the occupying power's responsibilities Florian Westphal, ICRC spokesman

The two programmes have cost a total of about $40m since they were launched last year, he said.

Other ICRC aid programmes to the Palestinians would continue, he added, and the UN's World Food Programme may increase assistance to people who had been aided by the ICRC rural relief programme.

He said the Fourth Geneva Convention made occupying powers responsible for the economic welfare of the territories they occupy.

"The ICRC cannot substitute itself for the occupying power's responsibilities," he said.

An Israeli spokeswoman responded that Israel was eager for the Palestinians to take control of their own lives.

We hope all restrictions will be removed once we have a partner to negotiate with Shuli Davidovich, Israeli spokeswoman

"Like any other civil society, the Palestinians deserve to have a normal life. The number of work permits has been increased, and wherever possible curfews are removed," Shuli Davidovich of the Israeli Embassy in London told BBC News Online.

"The checkpoints are a preventative measure to prevent suicide bombers. We hope all restrictions will be removed once we have a partner to negotiate with," she said.

Mr Westphal conceded that Israel faced "a challenge" in trying to "reconcile their legitimate security needs with the fact that the Palestinians have to fulfil their needs".

Poverty

Intermittent border closures and tight restrictions on movement between Palestinian towns have crippled the Palestinian economy and forced many families into poverty, international agencies have found.

More than 50,000 Palestinians from Gaza and 100,000 from the West Bank worked in Israel before the current intifada, or uprising, began in September 2000.

In October, Israeli chief of staff, General Moshe Yaalon criticised tight restrictions placed on Palestinians, saying it encouraged Palestinian extremism.