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Gaza Aid Conference: Donors Discuss Rebuilding Gaza (SLIDESHOW)

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UPDATE: 1:30pm

International donors pledged $5.2 billion in aid for war-torn Gaza at a conference in Sharm el-Sheik, Egypt, today, reports the AP.

Egyptian Foreign Minister Ahmed Aboul Gheit called the figure "beyond our expectations," reports Haaretz.

Saudi Arabia is the biggest donor, pledging $1 billion, followed by the United States, which has pledged a combined $900 million for humanitarian aid and support for the Palestinian Authority, reports the AP.

Still to be determined is how the money will be distributed. Most international donors won't funnel money directly to the Islamic militants of Hamas that rule Gaza. And lack of a formal cease-fire between Israel and Hamas has kept Gaza's borders sealed to most aid shipments.

The conference gathered the presidents of Egypt and France, the U.N. chief and top diplomats from 45 nations _ including Hillary Rodham Clinton in her first Mideast trip as U.S. secretary of state _ in a high-profile attempt to show international support for reconstruction after Israel's crippling offensive against Hamas.

But the broader message was that Palestinian President Mahmoud Abbas and his rivals in Hamas must resolve their dispute and form a government that can move ahead with rebuilding in Gaza and return to the negotiating table with Israel.

From earlier:

International donors are meeting in Egypt to discuss funding reconstruction efforts in war-torn Gaza. U.S. Secretary of State Hillary Clinton used the conference as an opportunity to stress American support for a two-state solution and emphasize that the Obama administration will make Middle East peace a priority, the AP reports.

"We cannot afford more setbacks or delays _ or regrets about what might have been, had different decisions been made," she said in apparent reference to the failure of previous peace initiatives, including those pushed vigorously by her husband's administration.

With the Obama administration's Mideast peace envoy, George Mitchell, seated behind her at a conference meant to raise billions to help the Gaza Strip recover from its recent war with Israel, Clinton said President Barack Obama would continue the Bush administration's focus on seeking a two-state solution that entails Israel and a sovereign Palestinian state co-existing in peace.

She made it clear, however, that Mideast leaders could count on Obama to take a more active approach than did his predecessor, George W. Bush.

"It is time to look ahead," she said, with an eye on the human aspects of what years of regional conflict have meant for the Palestinians and others.

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Up to 75 countries and organizations are being asked to fund a $2.8 billion recovery effort, reports Al Jazeera English. However, how the reconstruction efforts will work remain unclear, it reports.

The territory is controlled by Hamas and Israel has said it will refuse to approve projects that could benefit the group.

"We definitely don't want to see the goodwill of the international community exploited by Hamas and serve Hamas's extremist purposes," Mark Regev, an Israeli government spokesman, said.

Hamas took full control of Gaza in June 2007 after driving out security forces loyal to Mahmoud Abbas, the Palestinian Authority president and leader of the rival Fatah group.

Hamas, which has not been invited to the conference in Egypt and is labelled a "terrorist" group by the US and the EU, has prepared its own reconstruction plan.

Palestinian President Mahmud Abbas told donors that financial aid was not enough to help Gaza, AFP reports. The aid needed to be coupled with an end to the conflict, he said.

"We are all conscious that the reconstruction and development efforts will remain insufficient, powerless and threatened in the absence of a political settlement," Abbas said at the conference in Sharm El-Sheikh.

"We appreciate your presence and the financial, economic and technical support that you are giving to the Palestinian people but we insist on the pressing need to achieve substantial progress towards a just settlement (of the conflict with Israel)."

Al Jazeera English also reports that UN Secretary General Ban Ki-Moon used the conference as an opportunity to condemn Israel for its blockade of Gaza.

"The situation at the border crossings is intolerable. Aid workers do not have access. Essential commodities cannot get in," he told donors.

"Our first and indispensable goal is to open crossings."

Palestinian journalist and Huffington Post contributor Daoud Kuttab is traveling with Clinton and writes that most of the money pledged by the United States will never make it to Gaza.

Apparently only one third of the monies to be pledged by Secretary of State Hillary Clinton will make it to Gaza. Wood told the press corps that $300 million will go for urgent humanitarian needs in response to the UN Gaza appeal. He indicated that this money will be channeled through UN agencies, and through USAID. A further $200 million will be pledged to help cover basic budget support of the Palestinian Authority. The PA is expecting a $1.6 billion deficit in 2009. A further $400 million will be provided to support the Palestinian Authority's Reform and Development Plan. These funds will go into institutional building as well as in support of the public security efforts of General Dayton. Dayton, a senior US military officer has been leading an effort to revamp and rebuild the Palestinian security forces in the West Bank.