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Qatar says to fund $60 mln pipeline from Israel to Gaza

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JERUSALEM, Feb 25 (Reuters) - Qatar on Thursday pledged $60 million to build a natural gas pipeline from Israel into the Gaza Strip that will end the energy crisis that has helped cripple the Gaza economy.

The Qatari statement, published on its Foreign Ministry website, came two days after Reuters reported that closed-door negotiations on the pipeline had reached a breakthrough.

Qatar coming on board publicly gives another boost to the project, which has a 2023 target date for completion.

The plan is for natural gas from the deepwater Leviathan field operated by Chevron in the eastern Mediterranean to flow through an existing pipeline into Israel, and from there into Gaza through a proposed new extension.

The European Union has said it would fund the Gaza-side of the pipeline.

Qatar said it "pledged to provide an amount of $60 million to finance the project to supply the Gaza Strip with the gas necessary to solve the electricity crisis," and that "this amount will be allocated for extending gas pipelines from the Israeli side."

Palestinian Prime Minister Mohammad Shtayyeh welcomed the pledge and said the pipeline will "resolve the problem of electricity in Gaza completely."

With pipeline funding secured, what remains is a gas purchase agreement with the Leviathan field partners.

For years the project was a distant prospect because of the Israeli-Palestinian conflict as well as internal Palestinian rivalries, but officials said that Israeli, Palestinian, Qatari and European interests have converged in recent weeks making plans more concrete.

Israel and Egypt maintain a tight blockade on Gaza, citing security concerns about the Islamist militant group Hamas, which seized control of the territory in 2007.

Today, Gaza's sole power station produces electricity for around 12 hours a day on diesel, a more expensive and polluting fuel. (Reporting by Ari Rabinovitch, Nidal al-Mughrabi and Ghaida Ghantous; editing by Jonathan Oatis)