Israel reviewing Gaza blockade format - minister

Britain's former prime minister Tony Blair visits the Earcroft Children's Centre in Darwen, Lanchashire May 4, 2010.

JERUSALEM (Reuters) - Israel is examining ways to ease its Gaza blockade, a cabinet minister said on Tuesday, calling the current policy counterproductive and confirming remarks by Middle East envoy Tony Blair that change is likely.

"It is time to end the closure in its current form. It does not provide any value to Israel. From a diplomatic standpoint it causes great image problems," Welfare Minister Isaac Herzog told Israel Radio.

International pressure has mounted to lift or ease what Israel calls its "closure" of the enclave, run by Hamas Islamists, since naval commandos stormed a Gaza-bound aid flotilla on May 31, killing nine pro-Palestinian activists.

An Israeli official said Prime Minister Benjamin Netanyahu would convene his cabinet on Wednesday to discuss a plan to widen the range of goods allowed into Gaza through army-controlled border crossings.

Herzog said Israel had informed Blair, who briefed EU foreign ministers on Monday, that it intends to "permit an easier passage of goods" to the Gaza Strip.

"At the moment, they are working on the technical details ... of an updated formula that would also prevent smuggling of munitions to the Gaza Strip," Herzog said.

Blair said on Monday that Israel had agreed in principle to begin easing the Gaza blockade "in days". In his remarks, Herzog gave no timeframe for revising the policy.

Israel imposed the blockade soon after Hamas, which has spurned Western calls to recognise the Jewish state's right to exist, won legislative elections in 2006. Restrictions were tightened after Hamas seized power in the Gaza Strip in 2007.

The EU wants Israel to move from a policy of banning the entry of many commercial goods into Gaza, except a few designated items, to accepting all products and prohibiting only those proscribed on a list.

Blair and EU foreign affairs chief Catherine Ashton said Israel was moving towards accepting a changed position on what is banned and said the list of proscribed items -- which includes weapons and "dual-use" items -- would be updated soon.

(Additional reporting by Luke Baker in Luxembourg, Editing by Paul Taylor)