U.S. plans "substantial" pledge at Gaza meeting

WASHINGTON (Reuters) - The United States plans to offer more than $900 million to help rebuild Gaza after Israel's invasion and to strengthen the Western-backed Palestinian Authority, U.S. officials said on Monday.

The money, which needs U.S. congressional approval, will be distributed through U.N. and other bodies and not via the militant group Hamas, which rules Gaza, said one official.

"This money is for Gaza and to help strengthen the Palestinian Authority. It is not going to go to Hamas," said the official, who asked not to be named as Secretary of State Hillary Clinton planned to announce the funding at a donors' conference in Egypt next week.

Neither the United States nor Israel have direct contact with the Islamist Hamas movement which runs Gaza and remains formally committed to the destruction of the Jewish state.

The official said the pledge was a mix of money already earmarked for the Palestinians and some new funding.

"The package is still shaping up," he said, when asked for specifics over how the money would be spent and a breakdown of old and new funding.

In December, the former Bush administration said it would give $85 million to the U.N. agency that provides aid to Palestinian refugees in the West Bank, Gaza, Jordan, Lebanon and Syria.

The March 2 donors' conference in Egypt's Sharm el-Sheikh resort aims to raise humanitarian and rebuilding funds for Gaza after Israel's invasion last December to suppress rocket fire against its cities.

Preliminary estimates put damage from the offensive, in which 1,300 Palestinians died, at nearly $2 billion.

Clinton's bid to get "substantial" funds could face an uphill battle in Congress because Hamas continues to rule Gaza and the U.S. focus is on its own souring economy.

BOOST FOR ABBAS

Part of the goal of the new funding is to boost the Palestinian Authority of President Mahmoud Abbas, which controls the occupied West Bank.

The United States wants Abbas's PA to play a central role in the reconstruction effort in Gaza, hoping this will increase its influence in the Hamas stronghold. Washington is also putting pressure on other donors to bolster Abbas.

"We call on donor countries to focus their pledges to meet the Palestinian Authority's priorities, including budget support, and on projects that can be funded through the Palestinian Authority and other existing, trusted mechanisms," said a State Department official.

The quartet of Middle East mediators -- the United States, the European Union, Russia and the United Nations -- are expected to meet on the sidelines of the Egyptian conference where they will work on strategy on Gaza, U.S. officials said.

After attending the conference in Egypt, Clinton is expected to go to Israel and the West Bank -- a public demonstration of Obama's promise to make Arab-Israeli peacemaking a foreign policy priority.

Clinton's special envoy to the region, George Mitchell, will be there this week trying to revive stalled Palestinian statehood talks complicated both by Hamas and political uncertainty in Israel after last week's election.

(Editing by Vicki Allen and Alan Elsner)