Q&A: Why is Gaza under blockade? What's the impact?

Palestinians cast shadows as they wait to cross to Egypt at the Rafah border crossing in the southern Gaza Strip June 1, 2010. Egypt opened its border with the Gaza Strip on Tuesday, letting Palestinians cross until further notice amid a storm of international criticism of Israel's blockade of the enclave, officials in Egypt and Gaza said.

JERUSALEM (Reuters) - World powers including China and Russia called on Israel on Tuesday to lift its blockade of the Gaza Strip following the killing of nine activists during an Israeli operation to stop ships delivering aid there.

How did the embargo start, what is its impact and how does Egypt cooperate in enforcing it?

HOW DID THE BLOCKADE BEGIN?

Israel imposed restrictions on the Gaza Strip after it pulled out troops and settlers in 2005. They were tightened after the 2006 parliamentary election victory of Hamas, the Islamist movement which rejects interim peace terms; after Hamas captured Israeli soldier Gilad Shalit in June 2006 and again in 2007 when Hamas seized full control in Gaza.

Israel says the embargo is a response to Hamas's hostility -- a hostility expressed in thousands of rockets and mortar rounds fired over the border, prompting an Israeli offensive in late 2008. Israel aims to deny Hamas the ability to arm and to weaken the movement's popularity among civilians.

Hamas sees the blockade, imposed with Egypt's help, as a form of economic blackmail designed to turn the people of Gaza against it and force a softening of its policy toward Israel. To Hamas, the blockade is itself an act of hostility.

WHAT HAS THE ECONOMIC IMPACT BEEN?

U.N. agencies have charted a deteriorating humanitarian situation and rising poverty in the Gaza Strip as a result of the blockade. A recent survey by the U.N. Relief and Works Agency (UNRWA) found the number of refugees living in abject poverty had tripled since 2007. The private sector has collapsed and 42 percent of Gaza's residents are out of work, UNRWA says.

Palestinians are using tunnels to bring in supplies from Egypt. Most goods -- even new cars -- are available from smugglers, but at prices that are too high for many people. Aid agencies ensure basic food is plentiful but complain of scarce medical supplies.

Reconstruction after Israel's 3-week 2008-09 offensive has been stalled due to restrictions on the supply of building materials. Israel restricts supplies of cement and iron on the ground that they can be used for military purposes.

Israel says there is no humanitarian crisis in the Gaza Strip and says it ensures adequate food supplies. UNRWA strongly disagrees, saying there is a humanitarian crisis. Earlier this year, Israel allowed clothes and shoes into Gaza for the first time since 2007.

U.S. State Department spokesman P.J. Crowley, reacting to Israel's naval action, said the United States wants to ensure there is adequate access for humanitarian goods through the Gaza border crossings "while bearing in mind the government of Israel's legitimate security concerns."

The United Nations wants an immediate end to the embargo.

WHAT HAS THE POLITICAL IMPACT BEEN?

There are signs of discontent with Hamas's rule in Gaza, but for now there is no real threat to its control there. Equally, there is no sign the Iranian- and Syrian-backed group is bending to demands that it accept peace agreements signed by other Palestinian groups with Israel.

Hamas, which controls the tunnels, is still able to pay salaries to its employees, including thousands of security men.

Discontent with shortages and a lack of freedom to travel seem to have eroded Hamas's popularity, but accurate opinion sampling is difficult.

The Western-backed Palestinian Authority, based in the West Bank, also continues to pay salaries to thousands of Palestinian civil servants who were on its payroll at the time Hamas took control of Gaza.

WHAT IS EGYPT'S ROLE?

Egypt controls the Rafah crossing, the only gateway to Gaza not controlled by Israel, and cooperates in maintaining the blockade -- a role that has led to fierce criticism of Egypt across the Arab and Muslim world.

Egypt rarely opens the crossing, citing arrangements agreed in 2005 with the United States, the European Union, Israel and the Palestinian Authority at the time of Israel's unilateral withdrawal from the Gaza Strip.

Conscious of the criticism, Egypt said on Tuesday it would open the crossing for people and aid until further notice.

Egypt fears that allowing free movement of goods and people through Rafah would allow Israel to wash its hands of the territory, which the Jewish state captured from Egypt in the 1967 Middle East war.

Today, Egypt has a 30-year-old peace deal with Israel and a strained relationship with Hamas, which is an offshoot of the Muslim Brotherhood, the largest opposition group in Egypt and officially banned there.

(Writing by Tom Perry, editing by Alastair Macdonald and Tim Pearce)