seige for natural gas.
There is a huge amount of natural gas off the coast of Gaza. Israel does not want to pay money to Hamas for the natural gas.
Who Owns the Gas Fields
The issue of sovereignty over Gaza's gas fields is crucial. From a legal standpoint, the gas reserves belong to Palestine.
The death of Yasser Arafat, the election of the Hamas government and the ruin of the Palestinian Authority have enabled Israel to establish de facto control over Gaza's offshore gas reserves.
British Gas (BG Group) has been dealing with the Tel Aviv government. In turn, the Hamas government has been bypassed in regards to exploration and development rights over the gas fields.
The election of Prime Minister Ariel Sharon in 2001 was a major turning point. Palestine's sovereignty over the offshore gas fields was challenged in the Israeli Supreme Court. Sharon stated unequivocally that "Israel would never buy gas from Palestine" intimating that Gaza's offshore gas reserves belong to Israel.
In 2003, Ariel Sharon, vetoed an initial deal, which would allow British Gas to supply Israel with natural gas from Gaza's offshore wells. (The Independent, August 19, 2003)
The election victory of Hamas in 2006 was conducive to the demise of the Palestinian Authority, which became confined to the West Bank, under the proxy regime of Mahmoud Abbas.
In 2006, British Gas "was close to signing a deal to pump the gas to Egypt." (Times, May, 23, 2007). According to reports, British Prime Minister Tony Blair intervened on behalf of Israel with a view to shunting the agreement with Egypt.
The following year, in May 2007, the Israeli Cabinet approved a proposal by Prime Minister Ehud Olmert "to buy gas from the Palestinian Authority." The proposed contract was for $4 billion, with profits of the order of $2 billion of which one billion was to go the Palestinians.
Tel Aviv, however, had no intention on sharing the revenues with Palestine. An Israeli team of negotiators was set up by the Israeli Cabinet to thrash out a deal with the BG Group, bypassing both the Hamas government and the Palestinian Authority:
"Israeli defence authorities want the Palestinians to be paid in goods and services and insist that no money go to the Hamas-controlled Government." (Ibid, emphasis added)