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Last Updated: Friday, 1 September 2006, 15:57 GMT 16:57 UK
Donors pledge Palestinians $500m
Palestinian family mourns man killed by Israeli military
Scores of Palestinians have been killed by Israeli action in Gaza
International donors meeting in the Swedish capital, Stockholm, have promised $500m (262m) in aid for the Palestinian territories.

UN aid chief Jan Egeland, who warned that lack of aid had made Gaza a "time bomb", welcomed the news but said a new peace process with Israel was vital.

Palestinian aid has been hit since Hamas, which many Western countries say is a terrorist group, won power.

On Thursday, donors pledged $940m of help to rebuild Lebanon.

Reporting from Stockholm, the BBC's Alix Kroeger notes that donations for the Palestinian territories have been significantly less.

Mr Egeland had earlier told the conference that the Palestinians needed at least as much aid and money as the Lebanese.

It's not only a question of more money... It's also a question of third parties going in and mediating a solution between the Palestinians and the Israelis
Jan Egeland
UN aid chief

Earlier this year the US and European Union froze aid to the Palestinian Authority because of Hamas's refusal to renounce violence and recognise Israel.

A limited flow was later restored though aid workers say it is not enough.

One European official described the new money as "a band aid" for a deeper political problem, our correspondent says.

It buys time and makes people's lives more tolerable, the official added, but it is not a solution.

'Rock bottom'

Swedish Aid Minister Carin Jamtin, the conference's host, hailed the donors' pledges as "a fantastic result".

Palestinian girl stands near open sewage
All our dreams are cancelled - everything's cancelled - our priorities are feeding ourselves and just living
Government worker Nidha Younis
Ramallah, West Bank

She said that $55m of the funds would go towards the UN's emergency appeal which was launched last year, but which has struggled to meet its target.

A total of $114m would be spent on humanitarian aid, with the rest going towards the rebuilding of infrastructure and other projects, she added.

Ms Jamtin was quoted by The Associated Press as saying that many Arab countries would channel their donations not via the UN but through the Arab League or directly to the Hamas-led Palestinian authorities.

"The benefit of giving to the UN is that then we have a system for distributing the money," she added.

Social tensions

Mohammad Mustafa, an adviser to Palestinian President Mahmoud Abbas said the new aid would help save lives.

Mr Egeland also hailed the pledges for the Palestinians:

"I hope that this conference here could represent some kind of a rock bottom for how deep we could sink in despair for the Palestinian territories and that we now move forward."

Palestinian Authority employees protest in Hebron in the West Bank
Civil servants have not received their full wages for months

He had told those attending the meeting that 1.4 million Palestinians were "living in a cage" with border crossings closed and electricity and water shortages.

In the 25 years he had been visiting the Palestinian territories, he said he had "never seen so much hatred and bitterness" as during his last visit and he urged both Israel and Palestinian militants to cease hostilities.

"It's not only a question of more money... it's also a question of third parties going in and mediating a solution between the Palestinians and the Israelis," he said.

Israel has been conducting military operations in the coastal Gaza Strip since Palestinian militants captured an Israeli soldier in June.

More than 200 Palestinians have been killed while 11 Israeli civilians have been wounded by rocket fire from Gaza.

Strike appeal

One aid worker who returned from Gaza 10 days ago warned in Stockholm that malnutrition was widespread and many new mothers were unable to breastfeed their babies.

Unemployment is high, and in Gaza, the UN says nearly 80% of people live in poverty.

Palestinian Prime Minister Ismail Haniya has urged public sector workers in Gaza and the West Bank to abandon plans for an open-ended strike over the non-payment of their wages.

He said Palestinians needed to remain united in difficult circumstances and he appealed to teachers to attend their schools at the start of the new academic year on Saturday.

Mr Haniya was speaking after taking part in a clean-up of streets in Gaza City, where rubbish has piled up because of strikes by refuse collectors.

UN aid chief Jan Egeland's warning

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