Q+A: The Gaza blockade: What has changed? What's the impact?

GAZA (Reuters) - Israel is allowing Palestinians in the Gaza Strip to import consumer goods and raw materials banned until recently under an embargo imposed on the territory for more than four years.

Why has Israel kept Gaza under blockade, what has changed in the weeks since it announced the new policy on June 20 and is it making a difference?

WHY HAS GAZA BEEN UNDER BLOCKADE?

Gaza is ruled by Hamas, an armed group that is a sworn enemy of Israel and has refused to sign up to interim peace agreements concluded with Israel by the Western-backed Palestinian Authority.

Israel began imposing restrictions on Gaza after it withdrew settlers and soldiers from the territory in 2005, before Hamas came to power. Curbs on the movement of goods and people were tightened when Hamas won a parliamentary election in 2006 and again when militants from Gaza captured an Israeli soldier a few months later. Gilad Shalit, the soldier, remains in captivity. The sanctions were tightened further still when Hamas seized full control of Gaza in 2007.

For Israel, Gaza under Hamas rule is an "enemy entity". Thousands of rockets and mortar rounds fired by militants from Gaza into Israel prompted it to launch a three-week military offensive in Gaza in December, 2008.

Israel has justified the blockade in security terms and rejects the view that the embargo amounts to collective punishment of the 1.5 million people living in Gaza.

The Israeli state justified the policy as a legitimate form of economic warfare in response to a lawsuit filed against the state by the Israeli human rights group Gisha in 2007, documents released by the group show.

WHAT HAS CHANGED?

Israel announced the new policy toward Gaza on June 20 in the wake of an international outcry over its lethal naval raid on a Turkish ship that was trying to break the blockade.

Under its new policy, Israel will allow in all but a list of banned goods. Under the old system, all but a list of permitted items were banned.

According to Gaza Gateway, a site created by Gisha and which monitors the crossings, the old policy allowed less than 40 types of goods into Gaza. A list was never published. (gazagateway.org)

The new list of banned goods was announced on July 5. It includes more than 3,000 materials that Israel fears could be used for military purposes by Hamas, Israeli army general Eitan Dangot said.

Previously prohibited consumer goods from cake to tableware have started reappearing on grocery shelves and some factory owners say they have started to receive supplies of raw materials for manufacturing.

Smugglers who have been filling the supply gap by bringing everything from cars to cement through tunnels from Egypt are reporting a fall in demand for their services.

IS IT ENOUGH?

The new policy has been welcomed by Western governments which had called for the blockade to be lifted.

But critics have highlighted shortcomings that will inhibit recovery. The quantities of goods Israel has proposed letting into Gaza fall well short of what it needs to recover from destruction caused by both the blockade and war, they say.

There is no mention of allowing exports. Israel cites security concerns in justifying curbs on exports from Gaza.

EU foreign policy chief Catherine Ashton urged Israel to allow free movement of goods and people during a July 18 visit to Gaza. "The position of the EU is very clear: that we want the opportunity for people to be able to move around freely or to see goods not only coming into Gaza but exports coming out of Gaza," she said.

Gisha director Sari Bashi said that in the week ending July 24, 979 truckloads went in -- a 40 percent increase on the figure a month before. Raw materials accounted for 4 percent of the most recent deliveries. But the quantity is still only 40 percent of what used to enter Gaza before Hamas took control.

Under the new policy, cement and steel vital for rebuilding homes and reviving the economy will be allowed only for projects under international supervision.

That means private sector developers in need of such materials will have to continue to rely on the smugglers.

There is also no loosening of tight restrictions Israel imposes on the movement of Palestinians in and out of Gaza.

(Writing by Tom Perry, Editing by Samia Nakhoul)