Under the agreement, an Israeli company will supply industrial diesel for the Gaza Strip's only power plant and a temporary mechanism will be put in place whereby Hamas can pay the bill without dealing directly with its enemy, Israel.
Energy crisis in Gaza Strip deepens
Report: Hamas wants fuel, commodities only via Egypt
- Israel to transfer diesel fuel to Gaza
"The Hamas authorities in Gaza will pay the money ... to the PA and the PA will take care of the payment to the Israeli side," said the official, who asked not to be identified because he was not authorized to speak publicly about the deal.
Taher al-Nono, spokesman of the Hamas government in Gaza, said fuel would begin flowing on Wednesday. A first payment of two million shekels ($539,000) had already been transferred to the PA, he said.
Blackouts plague Gaza
Major power blackouts have plagued the Gaza Strip, disrupting the lives of many of its 1.7 million inhabitants, since February when neighboring Egypt cracked down on fuel smuggling into the enclave.
Hamas accused Egypt, Israel and the Palestinian Authority of causing the crisis in the hope of winning political concessions from the group, which has opposed U.S.-backed Israeli-Palestinian peace talks.
Officials from Palestinian President Mahmoud Abbas's Fatah movement have accused Hamas of pouring revenues from smuggled fuel into the Islamist movement's coffers.
The Palestinian Authority, led by Abbas, lost control of the Gaza Strip in 2007 in a brief civil war between Hamas Islamists and Fatah. The PA exercises limited self-rule in the Israeli-occupied West Bank.
The fuel crisis, which left Gaza residents with power only six hours a day and disrupted transportation, stirred public criticism of Hamas.
Ghassan al-Khatib, a spokesman for the Palestinian Authority, confirmed receipt of the first fuel payment, calling the deal a temporary arrangement until a long-term supply arrangement is reached with Egypt.
Gaza's power plant provides electricity to two-thirds of its population. Power is also supplied to the Gaza grid through power lines from Israel and Egypt.
Reuters and AFP contributed to this report
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