JERUSALEM, March 8 (Xinhuanet) -- Israel plans to phase out Palestinian labor by 2008, the head of the Israel Defense Forces (IDF) said on Tuesday.

    Israel made the decision in response to more than four years of fighting with the Palestinians, IDF chief Moshe Yaalon told a security conference, Ha'aretz reported.

    "Our goal is to stop any kind of Palestinian working in Israel by 2008. This is our policy, this is our political directive and this is because of what has happened here over the last four and a half years," Yaalon said.

    However, Israel will allow goods to flow freely through Israel's borders with the West Bank and Gaza Strip, a military official saidon condition of anonymity.

    Before the outbreak of violence in 2000, more than 150,000 Palestinian workers were in Israel, most in menial jobs Israelis refused to fill.

    Palestinian economy has traditionally relied heavily on work in Israel. During the recent violence when workers were barred from entering Israel, unemployment in the West Bank and Gaza Strip skyrocketed, leading to high poverty rates. Enditem