gaza rubble
A man walks inside the shattered remains of his home in Gaza City's Shejaiya neighbourhoodAFP

Israel and the Palestinian Authority have reached a deal with the United Nations to allow reconstruction work to begin in Gaza, according to the UN's Middle East envoy.

The UN would oversee the use of materials in the strip, following Israeli concerns that materials could be diverted and used to reconstruct the tunnels used by militants to stage attacks.

Robert Serry told the UN Security Council that the deal was brokered "to enable work at the scale required in the strip, involving the private sector in Gaza and giving a lead role to the Palestinian Authority in the reconstruction effort, while providing security assurances through UN monitoring that these materials will not be diverted from their entirely civilian purposes."

Much of Gaza's infrastructure was ruined after 50 days of fighting between Israel and militants aligned with Hamas, based in the occupied Palestinian territory.

The Palestinian Authority estimated that reconstruction would cost around $7.8bn (£4.8bn, €6bn,) while the Palestinian economist Maher al-Tabbaa estimated rebuilding would cost around $5bn.

International donors are set to meet in Cairo in October for a conference on rebuilding the coastal enclave.

Gaza's economy had already slowed before Israel launched Operation Protective Edge, as the territory had been under an economic blockade since 2007. Under the sanctions, imports into the strip are closely controlled by the Israeli and Egyptian authorities that manage their borders with Gaza.

Israel had agreed to ease the blockade as part of a ceasefire deal, but the specific changes are yet to be decided.