SHARM EL-SHEIKH, Egypt - The US was last night expected to pledge $US300 million ($A470 million) in humanitarian aid for the Gaza Strip after the 22-day Israeli offensive but will maintain restrictions to stop any of the money getting to Hamas.
US Secretary of State Hillary Clinton, who arrived in Egypt on Sunday to take part in a donors' conference for the reconstruction of Gaza, was also expected to announce $US600 million in help to the Palestinian Authority. The Palestinian Authority is controlled by Hamas' main rival, Fatah, which is ruling by emergency decree in the occupied West Bank.
The extra money not aimed at Gaza includes $US200 million to pay Palestinian Authority wages - much of which was previously announced - and $US400 million to support development in the West Bank. The full package awaits congressional approval.
Taken together, the announcements underscore how little the Obama Administration's policy towards the Palestinian issue has so far differed from the Bush administration's.
Although Mr Obama has named a Middle East envoy, a step George Bush resisted, the policy to be outlined at the conference indicates that the Administration will maintain a tough stance on Hamas, seeking to bolster the Islamist movement's rivals and keeping its distance from Palestinian efforts to create a unity government.
Mrs Clinton, making her first visit to the Middle East as chief US diplomat, did not speak to reporters on her arrival in Egypt.
Although the international quartet - the US, European Union, United Nations and Russia - has set conditions for dealings with Hamas, the EU has been looking for some sign of greater flexibility from the US on helping Gaza.
The question of engagement with Hamas will become more acute if negotiations between it and Fatah on a unity government are successful. The Bush administration shunned the previous unity government between March and June 2007.
"We're talking about an administration that is only one month in," US State Department spokesman Robert Wood said, when asked why Mr Obama appeared to be keeping to Mr Bush's path.
Gaza, where unemployment tops 40 per cent and 80 per cent of the population lives below the poverty line, was devastated by the recent offensive, which Israel launched after a ceasefire broke down and Hamas rockets rained down on Israeli towns.
Former British prime minister Tony Blair, a special envoy of the quartet, visited a UN school in the Gaza Strip town of Beit Hanoun on Sunday and later told al-Jazeera TV the devastation was "very shocking".
Mr Blair, accompanied by the UN Relief and Works Agency's head in Gaza, John Ging, said Israel should immediately lift its economic blockade of the strip.
"I think there is a recognition that we have got to change our strategy towards Gaza," he said.
"I don't think anybody can come here and not be appalled by what is happening."
Mr Blair also visited Sderot, an Israeli town that has been frequently struck by Palestinian rockets in recent years.
Palestinian officials hope to raise as much as $US2.8 billion in humanitarian relief and reconstruction aid for Gaza. But Israel maintains tight control of crossings into Gaza and will not allow entry of any items that it says could be used by Hamas to re-arm. It bans or restricts the importing of cement, steel rods and other material necessary for construction.
International aid groups and Hamas have called for the crossings to be opened, saying the closures unfairly punish civilians.
The US position on humanitarian aid has been similar to Israel's stance, although on a recent visit by US politicians Massachusetts senator John Kerry complained to Israeli Defence Minister Ehud Barak about Israel's refusal to allow pasta through the crossing.
Israel insists that any humanitarian aid should pass through established agencies such as the UN, said Jonathan Peled, spokesman for the Israeli embassy in Washington.
Mrs Clinton is expected to hold talks today with Israeli officials, including Mr Olmert and Prime Minister-designate Benjamin Netanyahu.