Gaza City — Zohair Abu Shaban graduated at the top of his 2007 class in electrical engineering at the Islamic University here and after a lengthy application process, he was awarded the U.S. State Department’s prestigious Fulbright Scholarship to study in Connecticut.

But first Mr. Abu Shaban has to get out of Gaza. So far, that’s a feat even high-level American intervention has not yet achieved.

Since the Islamist militant group Hamas seized Gaza by force a year ago, Israel has declared the coastal territory a “hostile entity” and denied exit to its people, except in the most extreme cases.

While the blockade is meant to increase pressure on Hamas and turn Gazans against its rule, Israel’s tight control of the strip’s borders is seen here as collective punishment that is especially damaging to promising young Palestinians who have a rare chance to study outside Gaza’s crumbling education system.

Hundreds of students here are in danger of losing postings to universities across the world if they are not granted exit permits in the next two months, says Sari Bashi, director of the Israeli human rights group Gisha, which focuses on freedom of movement issues. Since January, she says, no students have been permitted to leave Gaza.

“Certainly, preventing young people from obtaining the skills they need to build a better future is bad for Palestinian society, but it’s bad for Israel as well,” Ms. Bashi says. “Trapping students is against our interests in terms of allowing our neighbors to build a peaceful society. At the end of the day we have to live side by side with the Palestinians.”

Like six other students from Gaza, Abu Shaban saw his chances to pursue a Fulbright vanish and then reappear. The U.S. canceled the scholarships for the Gazans two weeks ago, when Israel would not grant the seven recipients exit permits. U.S. political pressure seemed to bend Israel, however, and the scholarships were reinstated.

Nonetheless, when Abu Shaban went with his Fulbright colleagues last week to the Erez crossing point on their way to Jerusalem for interviews at the U.S. Consulate, he was detained for two hours, searched, and interrogated by Israeli security personnel about his affiliations with Hamas. He was eventually sent back to Gaza.

On Wednesday, a spokesman for the Israeli agency that coordinates activities in the Palestinian territories said that a decision was made to refuse exit permits to Abu Shaban and two other students, Fidaah Abed and Osama Dawoud, due to “individual security concerns.” Their only recourse may be to file a petition with the Israeli High Court of Justice.

Mr. Abed and Abu Shaban suspect that their denial is related to having studied at Islamic University, where many of the professors and administrators are affiliated with Hamas.

“This is collective punishment to treat everyone at this university as Hamas people,” Abed says, adding that there are no other universities in Gaza which offer degrees in their engineering fields.

According to a spokesperson with the U.S. consulate in Jerusalem, which is working to obtain exit visas for the three remaining students, the U.S. and Israeli governments are still working to resolve the issue.

While the Israeli internal security service, the Shin Bet, makes a recommendation about whether a certain person should be given an exit permit, it is the military that ultimately decides whether to grant it.

According to Mark Regev, Israeli Prime Minister Ehud Olmert’s spokesman, the political echelon has directed the military to facilitate the Fulbright program.

But “the situation with Gaza is not normal,” Mr. Regev says. “The regime there is conducting a war against the Israeli population in the south. It’s illogical to assume Israel would have business as usual with the Gaza Strip while the regime there is trying to kill our people.”

Hamas and other militant Gaza factions have attacked the border crossings numerous times since Israel withdrew from Gaza nearly three years ago. Militants have also launched rockets and mortars at nearby Israeli towns with near daily frequency, leading to the hard-line Israeli policy.

On Wednesday, Israeli leaders said they will give Egyptian efforts to broker an Israeli-Hamas truce more time before pursuing any broader offensive in the strip. That decision came as violence continued on the Gaza border and an Israeli attack on suspected militants killed a 6-year-old Palestinian girl.

In taking up the case of other trapped Gaza students, Gisha has filed petitions with the Israeli High Court of Justice involving two cases of students who were offered positions in the United Kingdom and Germany. In hearings last week, the court criticized the state’s blanket refusal of exit permits and directed it to clarify the reasons for that policy within 15 days.

The chairman of Israel’s parliamentary committee on education, Rabbi Michael Malchior, also criticized the policy. “We are a nation that for years was prevented from studying. How can we do the same thing to another people?” he said. “Trapping hundreds of students in Gaza is immoral and unwise.”

In particular, critics of the policy point out that such students are the very people Israel should be helping in Gaza, as they represent the more secular, pro-peace segments of Palestinian society that Israel and the U.S. want to see emerge victorious in the political and social struggle here against violent Islamist forces.

“Often American and Israeli officials believe that hard-line policies will turn people against our adversaries such as Hamas and Hizbullah,” says Theodore Kattouf, who served as U.S. ambassador in Syria and the United Arab Emirates and is familiar with the Fulbright screening process. “However when the general populace bears the brunt of those policies, the law of unintended consequences usually prevails.”

Abed calls himself a “victim” of the Hamas coup. He was accepted for a master’s degree in computer engineering at Columbia University. “We had no part in what happened here. Why are [the Israelis] treating us like criminals? It would be better for Israel to have their neighbors be educated than angry.”

While statistics could not be obtained for the public Palestinian Authority schools that Abu Shaban and Abed attended, exams given in Gaza schools run by the United Nations Relief Works Agency (UNRWA) paint a picture of a struggling education system. According to UNRWA, around 80 percent of its students in grades four through nine failed comprehensive math tests and about 40 percent failed Arabic language tests.

Abu Shaban and Abed say they often studied with 50 other students in the same classroom. Moreover, they say, there were days when fighting prevented them from attending classes.

“Fulbright scholars are always the best and brightest,” says UNRWA Gaza assistant director Aidan O’Leary. “Here in Gaza, because of the violence and the socioeconomic decline, these are really the very, very best.”