That is the verdict of a new report by aid agencies and rights groups working inside the Palestinian territory.
A ban on most exports from Gaza is "crippling" the economy, they say.
The report, "Dashed Hopes: Continuation of the Gaza Blockade", was compiled by 21 different groups, including Oxfam, Amnesty and Save the Children.
"Only a fraction of the aid needed has made it to the civilians trapped in Gaza by the blockade," said Jeremy Hobbs, Director of Oxfam International.
"Israel's failure to live up to its commitments and the lack of international action to lift the blockade are depriving Palestinians in Gaza of access to clean water, electricity, jobs and a peaceful future," Mr Hobbs added.
The report says there has been an increase in imports such as food and consumer goods but that import levels are still only just over one-third of what they were before 2007 when the blockade was originally tightened.
It also says only a tiny fraction of the construction materials needed to rebuild Gaza are being allowed in.
In June, Israel said it would allow in construction material for projects carried out by organisations such as the United Nations. But the report says Israel has so far approved only 7% of the UN's reconstruction projects in Gaza.
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Guide: Eased Gaza blockade
Business under the eased blockade
It says at the current rate it will take decades to carry out the UN's housing and schools projects in the strip.
Earlier this month the Director of the United Nations Relief and Works Agency (UNRWA) in Gaza, John Ging, told the BBC there had been "no material change" for people living in Gaza since the "so-called easing".
Mr Ging accused Israel of ignoring the demands of the international community to fully lift the blockade.
The report stresses that virtually all exports remain banned, having a devastating effect on Gaza's economy.
Janet Symes, Christian Aid's Head of Middle East Region, said that "with the continued ban on exports, Gaza is crippled economically".
"How can it stand on its own two feet? People want jobs to make a living in a dignified manner and not exist on handouts."
The only exports currently allowed out of Gaza are a limited number of flowers and strawberries.
Responding to the report Major Guy Inbar - a spokesman for the Israeli office which controls crossings into Gaza (Cogat) - said in a statement: "The claims of the organisations, as they appear in the report, are biased and distorted and therefore mislead the public."
He said the number of trucks entering Gaza from Israel every day had increased by 92% this June.
The United Nations says this is still only a fraction of what was being allowed into Gaza before 2007.
Israel originally tightened its blockade of Gaza in 2007 after the Islamist movement Hamas came to power. Israel, the US and the EU regard Hamas as a terrorist organisation.
Over the past decade Hamas has fired thousands of rockets into Israel, although that number has declined dramatically since Operation Cast Lead, Israel's major offensive in Gaza almost two years ago.
Fawzi Barhoum, a spokesman for Hamas, said the report's findings needed an urgent practical response: "The report needs an immediate translation into action to take an active and strong international decision to obligate the occupation government to end immediately the Gaza Strip's suffering and lift the siege,"
Under the blockade, Gaza is only permitted to export flowers and strawberries
Israeli government spokesman Mark Regev said Israel is easing the blockade but must check everything entering Gaza.
"Israel does not see the people of Gaza as our enemy. On the contrary, the people of Gaza suffer - like Israel suffers - from a terrible, authoritarian Hamas regime, and we are committed to making sure that civilian goods reach the civilian population of the Gaza Strip," he said.
Last month, the Israeli government was forced to reveal that the blockade was not only imposed for security reasons.
After a freedom of information request by the Israeli human rights organisation Gisha, the Israeli government released documents saying the blockade was originally tightened as part of a policy of "deliberately reducing" basic goods for people in Gaza in order to put pressure on Hamas.
These documents referred to Israeli policy up to the point when the government announced it was easing the blockade in June.
At the time, the director of Gisha, Sari Bashi, said: "Instead of considering security concerns, on the one hand, and the rights and needs of civilians living in Gaza, on the other, Israel banned glucose for biscuits and the fuel needed for regular supply of electricity - paralysing normal life in Gaza and impairing the moral character of the State of Israel."
"I am sorry to say that major elements of this policy are still in place."