RAMALLAH, West Bank – Egypt has agreed to help ease Gaza´s chronic power shortages as part of a three-stage plan that would eventually hook up the isolated territory to the regional grid, a Palestinian energy official said Monday.

Such a deal would represent a major leap in Cairo´s involvement in Hamas-ruled Gaza, and another step away from Egyptian cooperation with the Israeli blockade imposed after the militant group´s 2007 takeover.

Gaza has suffered frequent blackouts and fuel shortages since the blockade was imposed. Rolling power cuts intensified last week when Gaza´s only power plant shut down because of a growing shortage in black market fuel reaching the territory through underground tunnels.

Former Egyptian President Hosni Mubarak had sided with Israel in enforcing the Gaza blockade, trying to isolate the Islamists on his doorstep. However, since taking over last year, Egypt´s new rulers have eased Gaza´s isolation.

The Gaza energy deal, outlined by Palestinian officials on Monday, was struck between Egypt and the West Bank-based Palestinian Authority of President Mahmoud Abbas, a longtime Hamas rival. An Egyptian intelligence official said Hamas was also involved in the contacts.

The Egyptian official confirmed plans to gradually increase the Gaza power supply, both by sending more power from Egypt and by repairing the power plant, and to hook up Gaza to the regional grid.

He spoke on condition of anonymity because he was not authorized to brief reporters.

The deal appears to have been made possible, in part, by progress in reconciliation efforts between Abbas and Gaza´s rulers. Former bitter foes Abbas and Khaled Mashaal, Hamas´ top leader in exile, signed a Qatar-brokered deal in Doha on Feb. 6. Abbas is to head an interim unity government that replaces rival administrations in the West Bank and Gaza and leads the Palestinians to general elections.

Omar Kittaneh, head of the Palestinian Energy Authority, said Egypt proposed a three-stage plan for the power shortages, to be funded by the Islamic Development Bank.

In the first stage, Egypt would increase its electricity flow to Gaza by three to five megawatts in coming days.

In all, Gaza´s 1.7 million people need about 360 megawatts per day. Of that, Egypt supplied about 17 megawatts, Israel provided 120 megawatts against payment while the local power plant produced about 70 megawatts, Kittaneh said.

In coming weeks, engineers will set up a new transmitter and try to restore the Gaza power plant — hit in an Israeli air strike in 2006 — to full services, Kittaneh said. The repairs and the new transmitter should increase electricity output by at least another 140 megawatt, he added.

In the final stage, Gaza would be linked to the regional grid that includes Egypt, Jordan, Syria, Turkey, Iraq and Lebanon.

Kittaneh said Egypt proposed the plan which was approved by Abbas and Palestinian Prime Minister Salam Fayyad. Kittaneh said he then met in Cairo with Egyptian officials to work out the details.

The Egyptian official said the energy deal is part of a wider Egyptian effort to cut down on smuggling to Gaza. Most of Gaza´s fuel came through the tunnels, along with cement and other items Israel still won´t allow to pass through its crossings.

In recent weeks, black market fuel being shipped to Gaza through Egypt´s Sinai Peninsula largely dried up, prompting the current energy crisis in Gaza.

"Egyptian officials said we should put an end to this problem and legalize the process and not leave it to the black market and smuggling," Kittaneh said Monday. "I think the atmosphere of reconciliation made this possible."

In a related development, about 300,000 liters of black market fuel reached Gaza on Monday and are to be used to restart one of the power plant´s three turbines, said the head of the station, Kaanan Obeid.

It was not immediately clear if the renewed shipment was a stop-gap measure, until the two sides can work out an above-ground fuel transfer.

Meanwhile, the Hamas prime minister of Gaza, Ismail Haniyeh, headed to Egypt on Monday for talks on energy supplies. ___ Associated Press writer Ibrahim Barzak in Gaza City contributed reporting. (© 2012 The Associated Press 02/20/12)