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The Emir of Qatar Sheikh Hamad bin Khalifa al-Thani (R), his wife Sheikha Mozah bint Nasser al-Missned (L), Hamas Prime Minister Ismail Haniyeh (2nd R) and his wife Amal Haniyeh arrive at a cornerstone laying ceremony for Hamad, a new residential neighbourhood in Khan Younis in the southern Gaza Strip October 23, 2012. The Emir of Qatar embraced the Hamas leadership of Gaza on Tuesday with an official visit breaking the isolation of the militant Palestinian Islamist movement, to the dismay of Israel and rival, Western-backed Palestinian leaders in the West Bank.MOHAMMED SALEM/Reuters

The Emir of Qatar embraced the Hamas leadership of Gaza on Tuesday with an official visit breaking the isolation of the militant Palestinian Islamist movement, to the dismay of Israel and rival, Western-backed Palestinian leaders in the West Bank.

Israel said it was "astounding" that Qatar, a U.S.-allied Gulf state whose oil and gas permit it to punch way above its diplomatic weight, would take sides in the Palestinian dispute and endorse Hamas, branded as terrorists in the West. The emir had "thrown peace under the bus," an Israeli spokesman said.

The Gaza Strip on the Mediterranean coast, is all but cut off from the world, under blockade by Israel and Egypt by land and sea to obstruct the import of arms and military equipment.

In the occupied West Bank, the Palestinian Authority of President Mahmoud Abbas, Hamas's archrival, said it hoped the visit would not undermine efforts to rebuild Palestinian unity or signal approval for a separate Palestinian territory in Gaza.

Embarking on what was a state visit in all but name, Sheikh Hamad bin Khalifa al-Thani and his wife Sheikha Mozah crossed from Egypt at the head of a large delegation, to be greeted by Hamas Prime Minister Ismail Haniyeh and an honour guard.

Hundreds of Palestinians lined his route, waving Palestinian and Qatari flags as the convoy with the sheikh in a black Mercedes limousine bumped along the rutted main highway that Qatar has promised to rebuild.

"You are today, by this visit, declaring the breaking of the unjust blockade," Mr. Haniyeh told the Qatari leader in a speech at the site of a new town to be built with emirate money.

"Today we declare victory against the blockade through this historic visit," he said. "We say thank you, Emir, thank you Qatar for this noble Arab stance ... Hail to the blood of martyrs which brought us to this moment."

Hamas rejects a peace treaty with Israel and has poured scorn on Mr. Abbas for his futile efforts to negotiate his way to a Palestinian state.

This was the first visit to Gaza by any national leader since Hamas seized control of the enclave and its 1.7 million people from Mr. Abbas's forces in 2007. Israel had pulled out its troops and settlers from the territory two years earlier.

Qatar has called the visit a humanitarian gesture, to inaugurate reconstruction projects financed by the emirate. After initially earmarking $250-million (U.S.) for the schemes, a smiling Mr. Haniyeh announced the fund now stood at $400-million.

The tiny Gulf emirate, whose native population is only about the same size as that of the Gaza Strip, has ambitions to parlay its vast natural gas wealth into diplomatic and regional influence. It was a major supporter of Islamist groups who have been the biggest beneficiaries of the Arab Spring.

Though giving up none of his absolute power as monarch at home, the Qatari ruler has promoted popular uprisings elsewhere and Qatar's Al Jazeera television has provided a platform for critics of many Arab governments.

It was the leading Arab power to provide political cover for the NATO-led operation that help rebels oust Libyan leader Moammar Gadhafi and it has led Arab opposition to Bashar al-Assad in Syria, providing arms and funds to Sunni rebels.

But its dual policy has perplexed regional and international players, with its strong support for Islamist groups including Hamas running in parallel with close ties to the United States.

Qatar hosts one of the biggest U.S. bases in the region.

Analysts see the visit as an attempt by the emir to use his leverage with Western capitals to help rehabilitate Hamas in Western eyes, and move them into mainstream politics, using their falling out with Shi'ite Iran over the conflict in Syria as a stepping stone to break Tehran influence on them for good.

Little damage has been repaired in Gaza since a devastating three-week offensive by Israeli forces in the winter of 2008-2009 to stop Hamas and other Islamic militant groups firing rockets and mortars at southern Israel communities.

The visit coincided with another round in the low-level conflict between Israel and Hamas. An Israeli officer was badly injured by an explosion on the Gaza border and Prime Minister Benjamin Netanyahu promised a "strong response", which often comes in the form of Israeli air strikes.

Israeli foreign ministry spokesman Yigal Palmor said the emir, who has met Israeli leaders but not visited the Palestinian Authority of Abbas and his secular Fatah movement in the West Bank, had "never dignified the PA with a visit".

"No one understands why he would fund an organisation which has become notorious with committing suicide bombings and firing rockets on civilians. By hugging Hamas, the Emir of Qatar is really someone who has thrown peace under the bus," he said.

Hamas refuses to renounce violence or to recognize Israel's right to exist and is ostracized by the West, the United Nations and Russia of the Middle East "Quartet".

However, Hamas has softened its position to a degree, by saying it would accept a decades-long truce with Israel in return for a state along lines established before the 1967 war.

It also denies any desire to create a separate state in Gaza, a 40-kilometre sliver of coastline with few resources.

Hamas has loosened its ties to Iran since the Syrian revolt, in which Mr. al-Assad's state forces backed by Tehran are fighting Sunni rebels. At the same time it has strengthened relations with its mentor, the Muslim Brotherhood now in control of Egypt.

Iran's nuclear program has raised the prospect of a war with Israel, with potential Hamas involvement in the south and attacks by Iranian-backed Hezbollah on the northern border.

Sheikh Hamad has also previously sought to mediate between Hamas and Fatah to end the divisions that have weakened the Palestinian cause. But Palestinian analysts say there is for now no prospect of reconciliation between the two factions.

Mr. Palmor said Hamas had not accepted the Quartet provisions required to be regarded as a legitimate interlocutor. However, Israel acknowledges that Hamas is trying to clamp down on renegade Islamic militant groups that refuse to accept its unwritten moratorium on firing rockets at the Jewish state.

Yossi Kuperwasser, who directs Israel's Ministry of Strategic Affairs, says "most of the activity is coming now not from Hamas. It comes from other sources."

"As we have seen in other places when Islamic forces come to power, they have to take into consideration other things and not (just) terrorism. They find themselves in a bit of an awkward position," he told reporters last week.

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