Israel on Thursday announced it reached an agreement with Qatar for the Gulf Arab country to resume aid payments to thousands of families in the Gaza Strip, a step aimed at easing tensions with the Hamas-ruled Palestinian territory in the wake of an 11-day war in May.

Qatar has provided hundreds of millions of dollars to the Gaza Strip in recent years. The funds have been a key source of stability for the impoverished territory, where unemployment is hovering at around 50%.

But since the May war, Israel has blocked the payments, insisting on safeguards that none of the money will reach Hamas. Under the system before the war, some $30 million in cash was delivered in suitcases to Gaza each month through an Israeli-controlled crossing.

Israeli Defense Minister Benny Gantz said that under the new arrangement, funds would be transferred by the United Nations directly to the bank accounts of Gaza families. Israel, he said, would maintain oversight over the list of recipients. The payments are expected to begin in the coming weeks.

“I have been in contact with Qatari officials to establish a mechanism that ensures the money reaches those in need, while maintaining Israel’s security needs,” Gantz said. He said Israel also was in touch with Hamas’ rival, the internationally recognized Palestinian Authority, to look at possible alternatives for transferring the funds under its supervision.

Hamas has complained about the delays in resuming the payments and threatened to resume fighting if the funds did not begin flowing again. Earlier this week, Palestinian terrorists fired a rocket into Israel for the first time since the war.

Israel did not respond to the rocket attack, indicating that diplomatic efforts were making progress.

The announcement came a day after Egypt’s intelligence chief, a key mediator between Israel and Hamas, made a rare visit to Israel to work on bolstering a cease-fire that ended the fighting in May.

Israel and Hamas, an Islamic terror group sworn to Israel’s destruction, are bitter enemies that have fought four wars and numerous skirmishes since Hamas took control of Gaza in 2007, a year after winning Palestinian legislative elections.

Israel and Egypt have maintained a tight blockade on the territory since the Hamas takeover. The blockade, which restricts the movement of people and goods in and out of Gaza, has crushed the area’s economy.

(AP)