It's used as a cheap source of labour by many Israeli companies too. And while not occupied in the classical sense, everything's going in or out is controlled. The airspace is controlled, the place is heavily monitored and the populace are under no illusions as to has the power.
So some rockets and mortars were smuggled in? Let's ban most civilian use of road and kill the economy. At least that's what the Wikipedia article on the west bank says. It's compared to Apartheid South Africa for good reason.
