* Qatar funds fuel for Gaza after torrential rains
* Despite supply, Gazans still face daily blackouts
* Israel, West Bank recovering from snow storm
By Nidal al-Mughrabi
GAZA, Dec 15 (Reuters) - Israel allowed the entry of 450,000 litres of fuel, paid for by Qatar, into the Gaza Strip on Sunday to enable the Palestinian territory's sole power plant to resume operations.
Gaza's 1.8 million people have been enduring daily blackouts of around 12 hours since the power plant was switched off 43 days ago due to a fuel shortage caused by neighbouring Egypt's closure of smuggling tunnels.
"Hopefully, the power plant will gradually resume full operation during the day. The fuel we are receiving from Qatar will allow us only to return to the old schedule of eight hours of cuts followed by eight hours of power," said Ahmed Abu Al-Amrain of the Gaza energy authority.
Qatar answered an appeal by Gaza's government, led by the Islamist Hamas group, after four days of torrential rains that killed two people and forced the evacuation of more than 5,000 residents from flooded homes, some accessible only by boat.
The Gulf state, which is spending $450 million in construction projects in Gaza, will pay $10 million to Hamas's West Bank-based rival, President Mahmoud Abbas's Palestinian Authority, which ordered the fuel for the enclave from Israel.
Israel has no direct dealings with Hamas, a group that is dedicated to its destruction.
Severe weather in the form of heavy snow also paralysed Palestinian cities such as Hebron in the occupied West Bank, as well as Jerusalem and parts of Israel's northern Galilee, but skies were largely clear on Sunday as crews worked to clear roads and restore electricity to thousands of homes.
Ismail Haniyeh, prime minister of the Hamas-run government, said Qatar was also sending a ship loaded with fuel to Israel's Mediterranean port of Ashdod for transfer to the Gaza Strip.
Those supplies, officials said, should keep the power plant partially running for at least 90 days.
Under years of Israeli sanctions, Gazan businesses cobbled together a smuggling-fuelled economy that sustained the territory. But the Egyptian military, which in July overthrew a Muslim Brotherhood government that had been sympathetic to Hamas, sees the Palestinian group as a security threat and has closed most of the 1,200 tunnels that ran under the frontier.
That may have choked off supplies of weapons as intended, but also of commercial goods including construction materials and cheap Egyptian petrol. Patchy alternative supplies of electricity from Israel's grid have meant 12-hour blackouts every day.
On Sunday, some Gazans were able to return to their houses after rescue teams pumped water from flooded streets. But many others were unable to leave their dwellings and government officials said at least 4,000 people were still in shelters.
The Hamas government said Qatar will also allocate $5 million to aid Gaza residents affected by the storm. An initial assessment issued by the government put damage caused to homes, businesses and infrastructure at $64 million.
Reporting by Nidal Almughrabi, Editing by Jeffrey Heller and Janet Lawrence