The European Union has contributed 13 million euros - $17.2 million - to upgrade the crossing through which goods enter Gaza, the Bethlehem- based Ma’an news agency reported on Tuesday.

The report said that a further 22 million euros, or $29.1 million, of EU funds will be used to build a medium scale wastewater treatment plant in the Tubas area.

EU Foreign Affairs chief Catherine Ashton was quoted in the report as having said the EU is “fully aware of the scarcity of water resources in the occupied Palestinian territory” and as such has “identified water as one of the focal sectors of its assistance.”

Ashton added, “The upgrading of the Kerem Shalom crossing point allows for an increased movement of goods in and out of the Gaza Strip.”

According to the Ma’an report, work on the crossing under the EU project, which will be conducted by the PA in coordination with Israel, will build and expand infrastructure including loading and inspection areas and warehouses, as well as providing IT equipment.

The report said Ashton signed the two agreements with PA Prime Minister Salam Fayyad in Brussels on Monday, ahead of a meeting of donors to the PA.

Fayyad recently warned that his government would reduce expenses if donor countries fail to pay aid they pledged to the PA.

Fayyad said last weekend that the PA would face a serious financial situation if funding does not arrive as promised.

Despite the claims by the Hamas-run government in Gaza of a humanitarian crisis caused by Israel’s blockade on the coastal enclave, Israel allows various goods to enter Gaza and also allows for the exporting of agricultural products, such as strawberries and carnations, from Gaza to Europe, as part of an extensive project financed by the Dutch government.

Despite the recent rocket barrage from Gaza, Israel kept open the Erez Crossing for passengers and employees of international organizations operating in Gaza. Kerem Shalom was open for the delivery of 200 truckloads to Gaza residents.

Israel often helps the residents of the coastal enclave. This assistance includes medical care, and more than once Israeli doctors have been able to save the lives of Gazan children.

Meanwhile, the PA is embarking on a new economic tactic to challenge Israeli authority over Jewish areas in Judea and Samaria, commonly known as “Area C” and which includes most of the land area in Judea and Samaria.

The PA told the Ad Hoc Liaison Committee in Brussels last week that it is asking donors to earmark money for development in Area C.

Palestinians "cannot simply wait for the conclusion of peace negotiations to reverse this de-development and destruction of livelihoods by the Israeli occupation," a report in Ma’an said, referring to Israeli authority over the land restored to Israel in the Six-Day War in 1967. (IsraelNationalNews © 2012 03/21/12)