U.S.: One-third of our $900m pledge is earmarked for Gaza

U.S. Secretary of State Hillary Clinton will pledge more than $900 million for the Palestinians at a donors conference on Monday but only a third of that is earmarked directly for Gaza, a U.S. official said on Sunday.

State Department spokesman Robert Wood said the pledge amounted to $300 million to meet "urgent" humanitarian needs in Hamas-ruled Gaza after Israel's invasion of Gaza in December.

The remaining funds would be to meet budget shortfalls of the Western-backed Palestinian Authority in the West Bank and to support economic and other reforms by the PA. None of the money would go to the militant group Hamas, he said.

Palestinian officials said Sunday that a donors' conference set to kick off in Sharm el-Sheikh should generate political pressure on Israel to open Gaza's borders, in addition to raising billions of dollars for rebuilding the territory after Israel's military offensive there.

Some 80 donor countries and international organizations will be asked to give at least $2.8 billion at a pledging Monday.

The presidents of Egypt, France and the Palestinian territories are attending, along with 45 foreign ministers. Among the high-profile visitors is Clinton, who arrived Sunday in the Red Sea resort for her first trip to the Middle East as U.S. secretary of state.

Gaza's Hamas rulers are not invited. Instead, the aid appeal will presented by Hamas' moderate rival, Palestinian President Mahmoud Abbas. Hamas wrested control of Gaza from Abbas' forces in June 2007, triggering a border blockade of the territory by Israel and Egypt.

Abbas' prime minister, Salam Fayyad, has prepared a 53-page reconstruction plan for the donors, including detailed damage assessments. For example, fixing war damage to infrastructure and homes would cost $501 million, according to the plan, which says 4,036 homes were destroyed and 11,514 damaged.

"The indications are that the conference tomorrow [Monday] will raise immediate money to implement our plan, Fayyadtold reporters in Sharm el-Sheikh.

However, reconstruction can only move forward if Gaza's borders open, he said.

"What I will tell the conference tomorrow is that what is needed now is to end the siege imposed on Gaza and to open all the border crossings," he said.

Fayyad's planning minister, Samir Abdullah, said Palestinians hope the conference will generate political pressure to lift the blockade. "We think that there will be messages from the conference to the Israelis in this regard," he said.

However, Israel has linked an opening of the borders to the release of Israeli soldier Gilad Shalit, held captive since June 2006 by Hamas-allied militants in Gaza.

Indirect talks between Hamas and Israel on a prisoner swap - Shalit for hundreds of Palestinian detainees - have dragged on and prospects remain uncertain.

Prime Minister's Office spokesman Mark Regev noted that Israel is allowing dozens of truckloads of humanitarian aid to enter Gaza. "Expanding the opening of the crossings to non-humanitarian aid is conditional on Hamas releasing Gilad Shalit," Regev said.

Egypt has also kept its crossing with Gaza closed since the Hamas takeover. Egypt has said it will only open the border terminal if Abbas' forces take up positions on the Gaza side.

Such an arrangement would require reconciliation between Hamas and Abbas. Egypt is currently mediating such talks, but as with the prisoner swap, prospects are uncertain.

Hamas, meanwhile, has sent mixed messages, suggesting it won't try to torpedo reconstruction efforts, but expressing anger over being sidelined.

"I don't think reconstruction can be done without the government in the Gaza Strip," Yusef Rizka, a Hamas official, said Sunday. "It could be a long [reconciliation] dialogue ... and people will suffer in the meantime."

Fayyad said that with open borders and sufficient aid, reconstruction could begin in six weeks. He wants most of the aid to be funneled through his West Bank-based government. He already administers huge sums of foreign aid - $7.7 billion for 2008-2010 - and has been sending $120 million to Gaza each month for welfare and salaries of Abbas' former civil servants. Other aid, such as for rebuilding homes, would go directly to the bank accounts of Gazans.

The U.S. is expected to pledge up to $900 million. The European Commission, the executive arm of the European Union, will give $554 million to the Palestinians for 2009, of which about half is expected to go to Gaza.

Gulf states have promised large sums - led by $1 billion from Saudi Arabia. However, Palestinian officials expressed concern that the Gulf countries would set up their own fund and not channel it through the Palestinian Authority.

Earlier Sunday, international Mideast envoy Tony Blair and two other top officials briefly toured Gaza.

Blair called for a new approach to Gaza, but like others in the international community was short on specifics on what he believes needs to be done to break the political deadlock.

"This money will not have a lasting impact unless there is a political solution," Blair said, referring to the donors' conference.

The World Bank's deputy director, Jean Jose Daboub, and Britain's International Development Secretary, Douglas Alexander, also visited the territory.

Issam Abu Taha, a wholesaler in the Gaza town of Rafah, said Gazans don't want handouts.

"When the borders are open, and everyone can work freely, we don't need aid," said Abu Taha, 48, whose flour imports from Israel dropped from 200 tons a day to 80 tons a week. "The situation will improve dramatically."