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Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Africa Europe Latin America Middle East North America Libya to fund Gaza homes after Israel approves aid Reuters - Wednesday, August 11 Send IM Story Print By Nidal al-Mughrabi GAZA - A rare agreement between foes Israel and Libya will let Libya underwrite the rebuilding of 1,250 Gaza Strip homes destroyed in Israel's offensive there last year, U.N. officials said on Tuesday. But Libyan officials denied there was any link between the aid agreement and the release this week of an Israeli photographer who had been arrested five months ago during a visit to the north African country. Israel and Libya are technically in a state of war, and oil exporter Libya has been one of Israel's most outspoken critics on the international stage for decades. The United Nations Relief and Works Agency to rebuild Gaza homes. In notably measured remarks about an age-old enemy, Israeli Foreign Minister Avigdor Lieberman this week described Libya as a "reliable partner." Lieberman, with assistance from an Austrian mediator, recovered 34-year-old Rafael Hadad, an Israeli photographer who was detained in March after travelling to Libya on a passport issued by Tunisia, the country of his birth. A Libyan official, who asked not to be identified, said in Tripoli: "There is no deal linking the release of Rafael Hadad and the entry of housing units sent by the Gaddafi Foundation into the Gaza Strip." The official said Hadad had been photographing old Jewish buildings and places of worship, was arrested because he told immigration authorities he was Tunisian, and was released after mediation by a European businessman. LIBYAN AID SHIPMENT Last month a Libyan-charted ship carrying cargo for Palestinians in Gaza, which is under an Israeli blockade, diverted instead to a nearby Egyptian port. The Israeli blockade has been the subject of international debate since nine activists were killed when Israeli troops raided a Turkish-led aid flotilla in May. Peter Ford, a representative of UNRWA's commissioner general, said at the signing of the agreement with the Gaddafi Foundation that hundreds of Palestinian families would benefit significantly from the deal, but Israel should do more. "UNRWA calls on the Israeli authorities to issue the necessary permissions promptly to allow us to use not only these new Libyan funds, but also Saudi, Dutch, Japanese, and other funds which are available to remedy this dreadful situation," said Ford in a statement released by UNRWA. Israel imposed a blockade on the Gaza Strip in 2007 after Hamas Islamists took over the territory. Israel bars the import to Gaza of cement and steel which it says could be used for fortifications and weapons production. The United Nations says this makes it difficult to rebuild Gaza. Libya had wanted Israel to let the aid ship Amalthea dock in Gaza in exchange for Hadad, an Israeli official said, speaking about the negotiations under condition he not be named. But Israel refused and the Amalthea docked instead at the nearby Egyptian port of El Arish. Israel agreed that some 20 prefabricated structures in its cargo could be admitted to Gaza. The Israeli foreign minister travelled to the Austrian capital to meet Hadad and bring him back to Israel. After bringing Hadad home on Monday Lieberman said: "I think that the deal with the Libyan government was very, very successful, reliable. We know that they are a reliable partner...and we will respect their demands regarding...some Palestinian issues." Israel says the blockade on Gaza, which was eased in June, is aimed at preventing the territory's Hamas rulers from bolstering their weapons stockpile. It also aggravates the privations of 1.7 million Palestinians in Gaza, many of whom depend on U.N. aid. 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