Q+A: As cash gushes, are things looking up for Gaza?

JERUSALEM (Reuters) - Wealthy governments were set on Monday to pledge some $3 billion to help Palestinians in the Gaza Strip following an Israeli offensive that killed 1,300 people, wounded many more and left some 16,000 homeless.

Here are answers to some key questions:

WHAT DIFFERENCE WILL ALL THIS CASH MAKE TO PEOPLE’S LIVES?

It is indeed a fair amount, roughly $2,000 for every man, woman and child in a crowded, coastal enclave where much of the 1.5 million population depends on aid handouts for survival. But there are serious doubts over how much real reconstruction aid will in fact be distributed because of Israel’s blockade and its efforts, supported by the Western-backed Palestinian leadership and Western powers, to deny aid to Gaza’s Hamas Islamist rulers.

SO IN FACT NOTHING WILL CHANGE?

Well, the Palestinian Authority, run in the Israeli-occupied West Bank by Western-backed President Mahmoud Abbas and Prime Minister Salam Fayyad, has been sending tens of millions of dollars a month into Gaza bank accounts since Hamas, winners of a 2006 parliamentary election, seized full control in Gaza in June 2007. This money goes to pay wages of public servants still on the PA payroll and some of the new aid pledged is designed to ensure such payments continue to keep many Gaza families afloat. The PA is also offering direct cash payments to bank accounts for those people who can show they need to repair their homes. In addition, the European Union, World Bank and others say they can channel funds directly to investment projects run by the United Nations and other agencies, not the Hamas-run government.

THAT SOUNDS POSITIVE FOR RECONSTRUCTION?

Except that the actual goods and materials required for rebuilding are not reaching Gaza. Israel, with the cooperation of Egypt which controls the other part of Gaza’s land border, will not allow in cement and other construction materials, including piping, because it says Hamas may use this to military ends, including building makeshift rockets to fire into Israel. Dozens of truckloads of food, medicines and other essentials, much donated by aid agencies and the rest imported by merchants, pass into the strip from Israel. But international agencies say much more is required, including building materials.

SO WHAT COULD CHANGE ISRAEL’S MIND?

Israeli leaders say they wanted Gaza’s economy to flourish when they pulled out troops and settlers in 2005 but that they will maintain their embargo on all but minimal humanitarian aid unless they can be sure it will not benefit Hamas. They say the proposed international mechanisms do not yet satisfy them. They have also warned that, with rocket fire returning to levels seen before the December 27-January 18 offensive, further Israeli military action against the Islamists in Gaza is becoming more likely.

IS THERE ANY PROSPECT OF A POLITICAL SOLUTION?

Israel and Hamas have been negotiating through Egyptian mediators on a formal ceasefire deal that Hamas wants to include an opening of trade crossings and a freeing of 1,000 or so Hamas prisoners. Israel, where the government of centrist Ehud Olmert is in the process of handing over to right-winger Benjamin Netanyahu following a February 10 election, has said it wants a soldier, Gilad Shalit, who was captured in 2006, freed first. And of course it wants an immediate end to all rocket fire.

Separately, Israel and the Western powers who shun Hamas for its refusal to recognize the Jewish state and renounce violence, want Abbas’s PA to handle reconstruction in Gaza, something Hamas has rejected without having its own role. Egypt last week launched a reconciliation process between Hamas, Fatah and other Palestinian factions. Negotiators are due to start meeting in committee next week. But although Western governments have made clear they would treat a Palestinian unity government less coldly than the Hamas-led administrations they boycotted in 2006-07, it seems far from certain Palestinian political unity is at hand. That may leave Gaza in the isolated hands of Hamas.

And while that division continues, the prospects of founding an Abbas-led Palestinian state in the West Bank and Gaza, as the Western powers are committed to doing, seem remote. Netanyahu has made clear he is in no hurry to negotiate such statehood.