JERUSALEM (Reuters) - Israel said Thursday it was easing a land blockade of the Gaza Strip that drew heightened international criticism after its deadly raid on an aid flotilla bound for the Hamas-run territory.
A new Israeli-approved product list includes all food items, toys, stationery, kitchen utensils, mattresses and towels, said Raed Fattouh, the Palestinian coordinator of supplies to Gaza.
But Israel maintained its sea blockade, a ban on exports from the coastal strip and a prohibition against the commercial import of building materials that are vital to wide-scale reconstruction after the December 2008-January 2009 Gaza war.
Hamas, an Islamist group locked in conflict with Israel, dismissed the new measures as trivial and "media propaganda."
"What is needed is a complete lifting of the blockade. Goods and people must be free to enter and leave. Gaza especially needs construction material, which must be allowed to come in without restrictions," said Hamas spokesman Sami Abu Zuhri.
Some 1.5 million people live in Gaza, of whom about 1 million depend to some extent on regular supplies of U.N. and other foreign aid brought in overland after Israeli inspection.
Richard Miron, spokesman for United Nations Middle East envoy Robert Serry, said they were encouraged by Israel's move, adding "we hope that today's decision by the security cabinet is a real step forward toward meeting the needs in Gaza."
The United States, Israel's main backer, said the decision was a positive step but welcomed further loosening.
"We want to see an expansion of the scope and types of goods allowed into Gaza to address the Palestinians' legitimate needs for sustained humanitarian assistance and regular access for reconstruction materials, while addressing obviously Israeli's legitimate security needs," said State Department spokesman Mark Toner.
He added that U.S. special envoy George Mitchell would continue to work on ideas with Israeli leaders in coming days.
An Israeli statement, issued after a security cabinet meeting, said "it was agreed to liberalize the system by which civilian goods enter Gaza (and) expand the inflow of materials for civilian projects that are under international supervision."
Israel has said unrestricted import of cement and steel could lead to Hamas Islamists seizing the material and using it to rebuild military infrastructure. It already allows in limited quantities of construction material for U.N. projects.
The announcement did not specify how procedures for the import of commercial goods would change or list any specific products, saying only that cabinet ministers would decide in the coming days how to implement the revised policy.
It noted "existing security procedures to prevent the inflow of weapons and war materials" would continue.
Defense Minister Ehud Barak said more goods would reach the Gaza Strip "without lifting the sea blockade," a measure Israel says is aimed at curbing arms smuggling to Hamas.
Israel faced intensified international calls to relax or lift its Gaza embargo after the killing by Israeli commandos of nine pro-Palestinian Turkish activists during the interception at sea of an aid convoy on May 31.
Israeli leaders said the troops acted in self-defense after being swarmed by activists who attacked them. Turkey, a once-close Muslim ally, accused Israel of "state terrorism."
A Turkish Foreign Ministry official said Ankara wanted to evaluate the Israeli move. "However, our attitude on the issue is obvious: we expect that the blockade be lifted altogether."
EU foreign policy chief Catherine Ashton said the European Union hoped "the in-principle statement by the Israeli government can now be followed up very quickly with the detail which we shall look at with interest."
Italian Foreign Minister Franco Frattini said in Rome Israel has understood that a blockade strategy is counterproductive," echoing Israeli and foreign critics of the embargo who have said such pressure only rallies Gaza residents around Hamas.
European diplomats had said a plan drawn up in coordination with Middle East envoy Tony Blair called for Israel to move from banning the entry of many commercial goods to accepting all products and prohibiting only a list of specified items.
Blair represents the Quartet of international powers -- the United States, European Union, United Nations and Russia -- seeking Middle East peace. He held talks last week with Prime Minister Benjamin Netanyahu and met with U.S. Secretary of State Hillary Clinton in Washington on Thursday.
Israel imposed the blockade soon after Hamas, which has rejected Western calls to recognize its right to exist, won a Palestinian election in 2006. Restrictions were tightened after Hamas's takeover of Gaza.
A network of smuggling tunnels under the Gaza Strip's border with Egypt keeps the enclave supplied with a variety of black market commercial goods. Hamas maintains its own tunnels, which are also used for weapons smuggling.
Humanitarian aid shipments are transferred regularly via border crossings with Israel, but international aid groups say more supplies are needed.
The security cabinet's deliberations coincided with another visit to Israel and the Palestinian territories by Mitchell, who met Netanyahu and Barak in Jerusalem.
Mitchell is mediating indirect talks between Israel and Palestinian President Mahmoud Abbas's Palestinian Authority, which holds sway only in the West Bank after the Fatah movement lost control of Gaza to rival Hamas in a brief war in 2007.
"This is a period in which we urge all concerned to exercise restraint and to avoid confrontation," Mitchell said at the start of his current round of talks.
Additional reporting by Nidal al-Mughrabi in Gaza and Andrew Quinn in Washington; Editing by Mark Heinrich