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A two-dimensional (2D) plane model of saltwater intrusion was developed, for the simulation of groundwater level and the average solute concentration in a 2D horizontal plane, together with the estimation of the saltwater depth. The proposed approach is of particular interest when assessing the effect of different regional pumping scenarios on groundwater level and its quality. The corresponding MEL2DSLT code was developed on the basis of the Modified Eulerian–Lagrangian (MEL) method to overcome difficulties arising from hyperbolic behavior of flow and transport equations, due to the advective nature of solute transport and heterogeneity of the soil characteristics (permeabilities and dispersivities). The code was verified against the 2D cross sectional model SUTRA and the three-dimensional (3D) model SWICHA. Simulation was conducted concerning the problem of saltwater intrusion in the Khan Yunis portion of the phreatic coastal aquifer of Gaza Strip. After calibrating the model for the aquifer parameters, we investigated its predictions resulting from various regional pumping scenarios using the actual pumping intensity from the year 1985 and extrapolating on the basis of 3.8% annual population growth. Results show a considerable depletion of groundwater level and intrusion of seawater due to excessive pumping.