Gaza gets chocolate but no cement as embargo eases

Palestinians try to break off gravel from a destroyed building at an abandoned airport that was hit by an Israeli air strike in the southern Gaza Strip July 1, 2010. The gravel will later be sold and used for new construction.

GAZA (Reuters) - If you have cash to spare in Gaza, you can treat your children to new varieties of chocolate Israel has just let in for the first time in a few years, or splash out on new tableware it allowed into the territory this week.

If you need cement and steel to rebuild a home destroyed by war, you'll have to wait a bit longer.

Israel is still deciding exactly what it will and will not allow into Gaza under a new approach toward the enclave, which it has blockaded for four years. As it changes the policy, some previously banned goods have started to flow across the border.

As yet, there is no sign of the basic materials and machine parts which aid workers and businessmen say Gaza needs if the homeless are to be rehoused and the economy is to be revived to alleviate growing poverty attributed to the blockade.

Facing an international outcry over its lethal raid on a Turkish aid ship that tried to break the embargo last month, Israel announced on June 20 that it would ease the blockade.

The announcement was welcomed by foreign governments which have urged Israel to lift or ease the embargo.

The steps taken by Israel so far have disappointed Palestinians who want ready access to materials such as cement, not consumer goods which are plentiful for the few with spare cash.

Gaza has yet to rebuild from Israel's 2008-2009 offensive against Hamas, the Islamist movement which governs here and the stated target of the blockade, imposed because of the group's hostility toward Israel.

Over the past two weeks, the easing of the embargo has allowed grocers to fill their shelves with cornflakes, cakes, biscuits, shampoo and razor blades supplied through the Kerem Shalom crossing to Gaza.

CONSUMER GOODS NOT NEEDED

Like most items, these goods were available, if expensive, from black marketeers who have been filling the supply gap by bringing in merchandise through tunnels from Egypt, Gaza's main supply route for the past two years.

"The market cannot absorb this," said grocery store owner Emad al-Buzm, as he turned away boxes of vacuum-wrapped cakes that had just arrived from Israel.

"The country needs materials that employ people: cement, metal, raw materials for the factories," he said, alluding to the economic hardship in Gaza. The United Nations' agency UNRWA which cares for Palestinian refugees says 80 percent of the population now depends on its food aid, compared with 40 percent a few years ago.

Palestinian officials say washing machines, refrigerators and bathroom fittings are expected in the next few days. Car parts dealers have been told to expect windshield wipers and headlamps, but add that Gaza's motorists are in greater need of engine components that will make their cars run.

The prospect of receiving goods via Israel is a relief to dealers such as Khaled al-Nimr, owner of a car parts company whose own vehicle is out of action because of a broken pump that he cannot easily replace.

It has been more than four years since he received stock via Israel. The high cost of importing through the tunnels make Kerem Shalom a far preferable route.

"If a part costs 100 euros, it reaches Gaza from Egypt costing you double," he said, expressing the hope that Israel would let in the components that would help rehabilitate the dilapidated vehicles that navigate Gaza's worn-out roads.

BLACKLIST AWAITED

Traders who have been bringing goods through the tunnels have cut their sales forecasts, anticipating that Israel's new policy will undermine the tunnel trade.

Fearing a drop in demand for the Egyptian-made televisions he has been selling, electrical goods store owner Abu Khaled ordered just a quarter of his usual stock in June.

"I am bringing in a limited amount because I'm worried prices will fall," he said.

Like other goods, cement and steel are available through the tunnels, but not at prices that make them affordable to Palestinians who need to rebuild their homes.

The prospects of Israel allowing such materials to flow freely to Gaza in the near future appear slim.

Israel has defined such construction materials as "dual use," meaning militants can use them for military purposes such as building bunkers and rockets to fire into Israel.

Under its previous policy, Israel banned all but a list of permitted goods. Now, it is preparing to allow in everything except arms and "problematic dual use" materials. A list of the items has yet to be published.

However, it has said it will "enable and expand the inflow of dual-use construction materials" for projects under international supervision, highlighting the example of a U.N. scheme to build 150 homes in the southern Gaza Strip.

The Quartet of Middle East mediators -- the United Nations, Russia, the United States and the European Union -- says full implementation of Israel's new policy would be "a significant shift in strategy" toward meeting Gaza's needs.

If it can get the materials it needs, UNRWA says it can immediately start work on construction projects throughout Gaza.

"We have the infrastructure, we have the engineers, we have maps, we have everything. We just don't have cement and iron," said UNRWA spokesman Adnan Abu Hasna.

"Ketchup and mayonnaise will not have any real effect," he said, referring to two of the food items recently allowed through Kerem Shalom into Gaza. "We need hundreds of thousands of tonnes of cement and iron."

Ali Abu Shahla, secretary-general of the Palestinian Businessmen's Association, says he is concerned by talk of a continued ban on "dual use" items. That will continue to cripple the private sector, he said. "Israel wants to ease the pressure on itself, not the blockade," he said.

(Additional reporting by Saleh Salam; editing by Andrew Dobbie)