Lieberman hints at work permit plan for Gazans

All permits were revoked in 2007 following Hamas's takeover of Gaza and today Israel allows only a small number of traders and employees of international organisations to cross through the Erez checkpoint on a regular basis.

Also on Tuesday, during a visit to Holland, Prime Minister Benjamin Netanyahu mentioned plans to cooperate with the Dutch government on laying a gas pipeline to Gaza and improving water infrastructure there. These plans, however, are still at a very early stage, while the work permits could be issued in a relatively short time.

The statements by both men echo the views held for a long time by a number of senior Israeli security officials. They have argued in closed forums that alongside Israel's military plans to neutralise Hamas, there should be a serious attempt to improve the economic situation inside Gaza.

One senior official, who asked not to be named, said recently: "Hamas are well entrenched in Gaza and we're not about to push them out.

"What we can do is to both create better living conditions for the people there and, at the same time, change the balance, so Hamas have a lot more to lose by launching rockets and provoking another round of warfare."

Around 47,000 permit-holding Palestinian workers from the West Bank currently cross over daily to work in Israel.

Security officials believe that the fear of losing income earned in Israel was a significant deterrent that helped curb the spread of Palestinian violence over the last 12 months.