Qatar on Tuesday launched a $254 million plan to rebuild and modernize Gaza, the biggest injection of reconstruction aid for the Palestinian enclave since parts of it were devastated in Operation Cast Lead nearly four years ago.

Projects announced at a news conference by Qatari ambassador Mohammed Al-Amadi will require the cooperation of Israel and Egypt to admit building materials and heavy machinery to Gaza,  which is under a partial blockade.

Amadi said this had been arranged. Work would begin on site within three months, starting with a highway that will run the length of the Mediterranean coastal strip.

The projects are of sufficient scale to transform Gaza and the lives of its 1.6 million people, 28 percent of whom are unemployed.

Economists said thousands of jobs would be created by local contractors who have won tenders to do the work and smaller businesses that will supply and service them.

The Islamist Hamas movement which rules Gaza welcomed the announcement as proof that Gaza had emerged from isolation. An aide to Hamas prime minister Ismail Haniyeh called it "the first drop of rain."

Hamas' international alliances have been shifting of late. Its ties to Shi'ite Muslim Iran have loosened over the past year and it has grown closer to the Sunni Muslim Brotherhood which now governs Egypt and the conservative Arab Gulf state of Qatar.

Qatar's envoy said politics played no role in the emirate's aid decision, but acknowledged that the government of Gaza would ultimately benefit, in addition to the people.

"The policy of the state of Qatar is that we make the projects, we design them, we finance them, and once they are finished we hand them over to the relevant ministry," he said. This is the policy of Qatar everywhere we act and Gaza is no exception."

Gaza grateful

"Thanks Qatar. You have fulfilled the promise," read a large billboard in Gaza city.
"Injecting such an amount of money in development and infrastructure projects would certainly get the economic wheels moving and bring down unemployment," said Gaza economist Maher Al-Tabba.

Parts of Gaza were left in ruins in January 2009 after Israel's three-week military offensive to stop Hamas and other Gaza militant groups firing rockets and mortars at southern Israeli communities.

More than 1,300 Palestinians were killed and 13 Israelis died in the conflict. Roads, homes, offices and factories were destroyed and subsequent reconstruction was choked by tight Israeli controls on any material that might have a military use.

Gazans started rebuilding from the rubble itself and smuggling cement from Egypt via tunnels until Israel partially eased restrictions in mid-2010, allowing Gaza's economy to revive from rock bottom.

The Qatar project will renew three main roads, establish a new town, build a hospital and residential buildings and overhaul the infrastructure.

"Because of the political situation it wasn't possible until now," Amadi told Reuters. "These projects are not for Hamas, they are for the people of Gaza."

Asked if Qatar was confident that what it helps to build over the next three years would not be smashed in a future war, the ambassador answered that "human life is more precious than bricks and steel."

"I don't think these are targets Israel would hit in the future. This is what we are hoping."