Cairo has agreed Monday to implement a three-stage plan that would end chronic fuel shortages in Gaza and eventually hook up the Hamas-run enclave to the regional Egyptian power grid.
The new Gaza energy deal comes after Gaza's power station went dark on February 14 due to a shortage of diesel fuel for its generators.
The current crisis was brought on when sources of black market fuel being shipped to Gaza through Egypt's Sinai Peninsula dried up after Egyptian authorities started to crack down.
"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," Omar Kittaneh, who heads the PA Energy Authority told reporters.
Meanwhile, about 300,000 liters of black market fuel were allowed into Gaza on Monday and are to be used to restart one of the local power plant's three turbines
Hamas has sought to blame Israel for the fuel shortage due to the embargo it imposed on Gaza following the kidnapping of Gilad Shalit in 2006.
Israel's arms embargo on Gaza, which the UN Palmer Report concluded was both legitimate and lawful as a means of protecting its citizens, was tightened after Hamas seized Gaza in a bloody 2007 putsch.
Prior to the 2007 Hamas-takeover Israel provided 120kw of electricity - and fuel for the local generator to produce 70kw of electricity - at market rates, which PA officials called "excessive."
Further complicating the situation is the lack of relations and banking arrangements between Israel and Hamas, which continues to seek the Jewish state's destruction.
However, UN agency for humanitarian affairs (OCHA) officials say Gaza has not relied on gas imports from Israel for some time and that Egypt, which refuses to open the Rafiah crossing, is where the shortage is occurring.
"Palestinians gradually developed tunnel infrastructure allowing the transfer of large quantities of fuel into Gaza, at a cheaper price, which resulted in an almost complete halt in the purchase from Israel," OCHA said.
Some observers, who note fuel is one of the items that flows from Israel to Gaza through the Kerem Shalom crossing, have suggested Hamas is manufacturing a crisis as a means of pressuring Egypt to open the Rafiah crossing.
The deal outlined by Egyptian officials on Monday was negotiated between Cairo and the Ramallah-based Palestinian Authority. An Egyptian intelligence official said Hamas was also involved in the contacts.
The officials 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.
In coming weeks, engineers will reportedly set up a new transmitter and try to restore the Gaza power plant — hit in an Israeli air strike in 2006 — to full services.
Hamas claims Israel is to blame for their failure to previously repair the station, but Israel began allowing building materials for critical infrastructure projects into Gaza in 2010.
The IDF oversees the shipment of 6,000 tons of food, fuel, merchandise and building material to Gaza every day and notes the Kerem Shalom crossing is never at full capacity due to all aid requests being met.
In 2011, Gaza residents exported surplus aid supplies to Somalia as a part of a Ramadan charity drive. Local residents have openly complained they have too much aid and not enough economy.
However, the IDF has also launched a program to aid Gaza farmers and manufacturers in exporting their goods to Israel, Jordan, and Egypt.
The year's first shipment of 30 tons of produce left Gaza for Jordan and Saudi Arabia on February 5. Furniture exports from Gaza, under Israeli guidance, began last year.