Israel has approved the building of $100 million worth of new houses and schools in the Gaza Strip, Israeli and UN officials said on Tuesday.

Guy Inbar, a military spokesman, said Israel had given the United Nations Relief and Works Agency (UNRWA) the green light to bring building materials for 18 new schools and 1,200 new houses into the Hamas-controlled territory.

He said the approval was immediate and the process could begin as soon as UNRWA was ready.

"I welcome this significant step and I hope it will happen in a timely fashion," said UN Middle East envoy Robert Serry. Israel says its Gaza blockade, which prevents certain supplies from entering the Strip, stops weapons from reaching Hamas, a militant group that refuses to recognize Israel's right to exist and frequently fires cross-border rockets.

Israel, together with Egypt, tightened a blockade on the Gaza Strip after Hamas Islamists seized it from forces loyal to Western-backed Palestinian President Mahmoud Abbas in 2007.

Israel has made clear it will prevent a planned pro-Palestinian aid flotilla from reaching Gaza. A year ago, nine Turkish activists, including one with dual U.S.-Turkish nationality, died in an Israeli raid on a similar convoy.

Israel, calling the new flotilla a provocation, has stepped up diplomatic efforts to block it. Organizers say the sea convoy, which they hope will set sail this month, will carry humanitarian aid and construction materials.

One foreign diplomat, speaking anonymously, suggested that Tuesday's approval for UNRWA to deliver housing materials