Area C doesn't sound very ominous. A land of stone-sprinkled grey hills and soft green valleys, it's part of the wreckage of the equally wrecked Oslo Agreement, accounting for 60 per cent of the Israeli-occupied West Bank that was eventually supposed to be handed over to its Palestinian inhabitants.

But look at the statistics and leaf through the pile of demolition orders lying on the table in front of Abed Kasab, head of the village council in Jiftlik, and it all looks like ethnic cleansing via bureaucracy. Perverse might be the word for the paperwork involved. Obscene appear to be the results.

Palestinian houses that cannot be permitted to stand, roofs that must be taken down, wells closed, sewage systems demolished; in one village, I even saw a primitive electricity system in which Palestinians must sink their electrical poles cemented into concrete blocks standing on the surface of the dirt road. To place the poles in the earth would ensure their destruction – no Palestinian can dig a hole more than 40cm below the ground.

But let's return to the bureaucracy. "Ro'i" – if that is indeed the Israeli official's name, for it is difficult to decipher – signed a batch of demolition papers for Jiftlik last December, all duly delivered, in Arabic and Hebrew, to Mr Kasab. There are 21 of them, running – non-sequentially – from numbers 143912 through 145059, all from "The High Planning Council Monitoring [sic] Sub-Committee of the Civil Administration for the Area of Judea and Samaria". Judea and Samaria – for ordinary folk – is the occupied West Bank. The first communication is dated 8 December, 2009, the last 17 December.

And as Mr Kasab puts it, that's the least of his problems. Palestinian requests to build houses are either delayed for years or refused; houses built without permission are ruthlessly torn down; corrugated iron roofs have to be camouflaged with plastic sheets in the hope the "Civil Administration" won't deem them an extra floor – in which case "Ro'i's" lads will be round to rip the lot off the top of the house.

In Area C, there are up to 150,000 Palestinians and 300,000 Jewish colonists living – illegally under international law – in 120 official settlements and 100 "unapproved" settlements or, in the language we must use these days, "illegal outposts"; illegal under Israeli as well as international law, that is – as opposed to the 120 internationally illegal colonies which are legal under Israeli law. Jewish settlers, needless to say, don't have problems with planning permission.

The winter sun blazes through the door of Mr Kasab's office and cigarette smoke drifts through the room as the angry men of Jiftlik shout their grievances. "I don't mind if you print my name, I am so angry, I will take the consequences," he says. "Breathing is the only thing we don't need a permit for – yet!" The rhetoric is tired, but the fury is real. "Buildings, new roads, reservoirs, we have been waiting three years to get permits. We cannot get a permit for a new health clinic. We are short of water for both human and agricultural use. Getting permission to rehabilitate the water system costs 70,000 Israeli shekels [about £14,000] – it costs more than the rehabilitation system itself."

A drive along the wild roads of Area C – from the outskirts of Jerusalem to the semi-humid basin of the Jordan valley – runs through dark hills and bare, stony valleys lined with deep, ancient caves, until, further east, lie the fields of the Palestinians and the Jewish settlers' palm groves – electrified fences round the groves – and the mud or stone huts of Palestinian sheep farmers. This paradise is a double illusion. One group of inhabitants, the Israelis, may remember their history and live in paradise. The smaller group, the Palestinian Arabs, are able to look across these wonderful lands and remember their history – but they are already out of paradise and into limbo.

Even the western NGOs working in Area C find their work for Palestinians blocked by the Israelis. This is not just a "hitch" in the "peace process" – whatever that is – but an international scandal. Oxfam, for example, asked the Israelis for a permit to build a 300m2 capacity below-ground reservoir along with 700m of underground 4in pipes for the thousands of Palestinians living around Jiftlik. It was refused. They then gave notice that they intended to construct an above-ground installation of two glass-fibre tanks, an above-ground pipe and booster pump. They were told they would need a permit even though the pipes were above ground – and they were refused a permit. As a last resort, Oxfam is now distributing rooftop water tanks.

I came across an even more outrageous example of this apartheid-by-permit in the village of Zbeidat, where the European Union's humanitarian aid division installed 18 waste water systems to prevent the hamlet's vile-smelling sewage running through the gardens and across the main road into the fields. The £80,000 system – a series of 40ft shafts regularly flushed out by sewage trucks – was duly installed because the location lay inside Area B, where no planning permission was required.

Yet now the aid workers have been told by the Israelis that work "must stop" on six of the 18 shafts – a prelude to their demolition, although already they are already built beside the road – because part of the village stands in Area C. Needless to say, no one – neither Palestinians nor Israelis – knows the exact borderline between B and C. Thus around £20,000 of European money has been thrown away by the Israeli "Civil Administration".

But in one way, this storm of permission and non-permission papers is intended to obscure the terrible reality of Area C. Many Israeli activists as well as western NGOs suspect Israel intends to force the Palestinians here to leave their lands and homes and villages and depart into the wretchedness of Areas B and A. B is jointly controlled by Israeli military and civil authorities and Palestinian police, and A by the witless Palestinian Authority of Mahmoud Abbas. Thus would the Palestinians be left to argue over a mere 40 per cent of the occupied West Bank – in itself a tiny fraction of the 22 per cent of Mandated Palestine over which the equally useless Yasser Arafat once hoped to rule. Add to this the designation of 18 per cent of Area C as "closed military areas" by the Israelis and add another 3 per cent preposterously designated as a "nature reserve" – it would be interesting to know what kind of animals roam there – and the result is simple: even without demolition orders, Palestinians cannot build in 70 per cent of Area C.