GAZA CITY -- Off a sandy alleyway, through an open door, industrial sewing machines buzz sharply. White cotton cloth stands in heaps on the floor, and sparkling purple and white dresses hang up for display against the drab breeze-block walls.Ibrahim Shinawi's workshop is a short drive from the Palestine Hotel on the seacoast, where Yasser Arafat, chairman of the Palestine Liberation Organization, has been holding court. But it is part of the Gaza Strip that Arafat did not see in his triumphant return to Palestine. Shinawi's garment sewing workshop, one of hundreds of such garage-sized shops scattered through this city, is part of the economic backbone of the Gaza over which Arafat is assuming control. The shop's problems help illustrate why the political independence from Israel that Arafat has won cannot be easily translated into economic independence, which is his latest rallying cry. Arafat has bristled at attempts by international donors to oversee the spending of aid given to the Palestinian authority that is beginning to govern Gaza and the Jericho region in the West Bank -- and he paints a brave picture of a spartan, self-sufficient economy as the alternative to "blackmail" by outsiders. In evocative metaphors, Arafat told Palestinians this week that the "children of the stones" who fought the Israeli military occupation can now turn their "strong arms" to building a self-reliant Palestine. "No one can starve us!" he declared to a group of Gaza village leaders. "In this country there are tough people, tough people."But the economic reality visible in Shinawi's shop contrasts with the picture of self-reliance that Arafat offers. While the Israeli military occupation of Gaza is over, the economic ties that bind the Palestinians to Israel remain as tight as ever. The truth is that Gaza -- the largest piece of Arafat's new regime -- has little to offer the rest of the world. Its economic backbone is its laborers, tens of thousands of whom are willing to work long hours for low pay. Before Israeli-Palestinian violence and public opinion forced Israel's government to tighten border controls, more than 120,000 Palestinians from the West Bank and Gaza worked each day inside Israel. Recently, the number has been rising and, as of this week, more than 46,000 Palestinians were commuting to jobs in Israel -- 19,000 of them from Gaza. But the bonds between Gaza and Israel are even deeper. According to Gaza's Union of Industrialists, the 535 garment shops such as Shinawi's and 56 textile factories represent about a third of Gaza's economy. More than 80 percent of them are sub-contractors for Israeli firms. Less than 1 percent sell to Europe or the Arab world, according to a survey by the industrialists. Gaza's dependence on Israel grew over the 27 years of Israeli military rule. Israelis justified it as a way to provide jobs for the Palestinians. Critics charged that Israel used the people of the occupied territories as cheap labor. Most of the garment workers in Gaza earn half of Israel's $2.60 per hour minimum wage, or less. Shinawi has five women at work, and another 13 outside trying to sell his products in Gaza, the West Bank, and in Israel, especially in Arab towns. He has been in the garment business for 20 years, but recently has found it difficult to get across the border to Tel Aviv to buy raw materials. Despite his -- and Gaza's -- economic problems, Shinawi said that, had Arafat stopped by his shop, he would not have been critical of the Palestinian leader. "We know he is not coming with a magic wand or a mountain of gold," he said. "Abu Ammar did his best," he added, using Arafat's nom de guerre. "He lifted the occupation from our country."Now, he said, the Palestinians have to take their cue from other nations who ended World War II with nothing, "and they went on to start an economic revolution."