U.S. offers $300 million to Gaza

By Sue Pleming

SHARM EL-SHEIKH, Egypt (Reuters) - U.S. Secretary of State Hillary Clinton will pledge $900 million (628 million pounds) for the Palestinians at a donors' conference in Egypt, but only a third of that is earmarked for Gaza, a U.S. official said on Sunday.

State Department spokesman Robert Wood said the pledge at Monday's conference amounted to $300 million to meet "urgent" humanitarian needs in Hamas-ruled Gaza after Israel's military invasion in December, and would be funnelled through U.N. and other organizations.

"Hamas is not getting any of this money," Wood told reporters in the Egyptian coastal resort, where Clinton arrived late on Sunday on the first leg of a week-long trip to the Middle East and Europe.

About $200 million of the U.S. pledge would help cover budget shortfalls of the Western-backed Palestinian Authority (PA) and the remainder was for economic reforms, security and private sector projects run by the PA, said Wood.

Monday's conference is aimed at raising funds to help with the post-conflict recovery of Gaza after Israel's offensive, but Washington also wants it to bolster President Mahmoud Abbas's Palestinian Authority, which governs the Israeli-occupied West Bank.

"We have to shore up the Palestinian Authority," said Wood.

How much of the U.S. contribution will ultimately materialise is unclear as the funds have to be agreed by the U.S. Congress, which is more focussed on fixing an economic crisis, and suspicious that some of the aid will reach Hamas.

U.S. aid contributions are further complicated by reconciliation talks among Palestinian factions, including Hamas, which the United States brands a terrorist group.