Gaza Donor Conference

The donors are demanding that the money be handled by the Palestinian Authority, which the Islamist Hamas evicted by force from the narrow coastal strip in June 2007.

"We expect rapid international aid from all parties to completely rebuild Gaza," Palestinian president Mahmud Abbas told reporters on Saturday, Feb. 28.

"We also expect that as in the past there will be one mechanism, the Palestinian Authority," he said after meeting EU foreign policy chief Javier Solana in the West Bank town of Ramallah.

Hamas has been boycotted by the major Western donors, who consider it a terrorist organization and who deal exclusively with Abbas' moderate Palestinian Authority.

The Palestinian Authority and Hamas each want to lead the rebuilding effort, but Western countries have said they will work only with Abbas.

"I would like to insist that the mechanism used to deploy the money is the one that represents the Palestinian Authority," Solana said. "I don't think there is a need for new mechanisms."

Star delegate at the aid conference in the Egyptian Red Sea resort of Sharm el-Sheikh will US Secretary of State Hillary Clinton, who will reportedly arrive bearing a check for $900 million (710 million euros).

Saudi Arabia is expected to reaffirm a commitment to provide $1 billion towards reconstruction, and the European Union has said it will grant $554 million to the Palestinian people in 2009.

Donor countries from the January 2008 Paris conference will reiterate a pledge of $7.4 billion in aid to the Palestinians in the three years 2008-2010, of which $3 billion has so far been distributed.

Palestinian Prime Minister Salam Fayyad has said he is seeking $2.8 billion to rebuild Gaza.

Around 75 delegations are scheduled to attend Monday's conference, which is organized by Egypt and Norway and sponsored by the United Nations, European Union, France, Italy and the Arab League.

The 1.4-million population of the Gaza Strip -- around half of whom depend on United Nations handouts -- are in dire need of help from the international community.

Gaza suffering under Hamas-targeted measures

The Gaza economy was brought to its knees by the blockade imposed by Israel from the time Hamas seized control of the enclave.

Then Israel's 22-day onslaught on the territory in December and January caused physical devastation, destroying homes, hospitals, schools and other infrastructure as well as killing more than 1,300 Palestinians.

Fayyad says the damage to homes has forced 90,000 people to live in tents now pitched amid the ruins.

Neither Israel nor Hamas will be represented at the gathering, but for the aid program to succeed Israel must lift its blockade and Hamas will have to be reconciled with the secular Fatah, backbone of the Palestinian Authority.

The rival Palestinian factions have agreed to start talks aimed at working towards the formation of a "consensus" government.

Israeli Prime Minister Ehud Olmert has said his priority is the release of soldier Gilad Shalit from captivity by Hamas, placing this aim above reaching a lasting truce in Gaza or negotiating to lift the blockade.

But Egypt is continuing discussions aimed at trying to broker a long-term truce, and the Middle East Peace Quartet will meet on the sidelines of the aid conference to discuss how to revive the peace process.

Clinton is expected to attend that event, as is Solana, UN head Ban Ki-moon and Russian Foreign Minister Sergei Lavrov.

Egyptian Foreign Minister Ahmed Abul Gheit said the aid conference has a double role: economic, to organize humanitarian aid and the reconstruction of Gaza, and political, focused on the peace process.

"The mechanism for the reconstruction will be fixed at Sharm el-Sheikh," he said, but whatever is agreed cannot be implemented until Israel agrees to end its blockade and open border crossings into and out of Gaza.

High political price for Hamas and Israel

Rebuilding war-shattered Gaza also carries a high political price for both Israel and Hamas.

Hamas may need to come to terms with a return of the Palestinian Authority while Israel could face growing pressure to reopen border crossings into Gaza that have been closed since the Hamas takeover to all but vital goods. The Israeli blockade was imposed in response to militant rocket and mortar fire.

The blockade would have to be at least significantly eased to allow in the materials needed to rebuild the overcrowded coastal strip.

And with such huge sums at stake, donors are bound to want results, not only in the daunting task of actually rebuilding Gaza but also in the search for a solution to the seemingly intractable Israeli-Palestinian conflict.

This could be particularly challenging at a time when Israel's hawkish Likud leader Benjamin Netanyahu appears set to form a right-wing coalition government opposed to any significant concession to the Palestinians.

"For reconstruction to work, a new environment has to be established," said Palestinian planning minister Samir Abdallah. "There has to be a climate of stability and security through a truce, but also a Palestinian government that is trustworthy," he said.

Hamas and Abbas's Fatah faction agreed in Egyptian-sponsored talks on Thursday to work together towards setting up a unity government that will supervise Gaza's reconstruction.

EU: donor conference an opportunity for dialogue

Solana said during a Middle East tour ahead of the conference that the gathering would also be an opportunity to "create a political dynamic" in the Israeli-Palestinian talks.

"Donors' money is political money," said Mohammed Shtayyeh, who heads the Palestinian Economic Council for Development and Reconstruction (PECDAR) tasked by the Palestinian Authority to supervise donor-financed projects. "Donors also come to support the peace process, and this will emerge from Sharm el-Sheikh."

Shtayyeh said that PECDAR has 56 architects and engineers in Gaza and was "ready to carry out any project it is given."

He insisted, however, that reconstruction would not be possible unless the blockade is lifted.

"Today one can't find a single bag of cement or steel bar in Gaza," he said.

The International Committee for the Red Cross stressed that efforts to rebuild Gaza can only succeed if they are accompanied by credible political steps to resolve the crisis.

"The first and most urgent measure should be to end the isolation of Gaza, particularly by lifting restrictions on the movement of people and goods," said ICRC President Jakob Kellenberger.