Audio Transcript:

MARCO WERMAN: The United Nations today warned that water supplies in the Gaza Strip are in danger of collapse. It's the latest bad news for the Palestinian territory which depends heavily on international aid. Conditions in Gaza worsened after last year's conflict with Israel. International donors pledged billions of dollars to help but Israel is preventing some rebuilding materials from getting into Gaza without assurances that those materials won't be used to make weapons. Linda Gradstein sent us this report from Gaza City.

LINDA GRADSTEIN: Here in the Jabalia refuge camp Maher al-Ameri spreads mortar on top of heavy cement blocks. He's helping to rebuild a four-story building that was almost completely destroyed in the Israeli bombardment. Senior Hamas leader, Nizar al-Riyan, lived in the building next door. Riyan, along with three of his wives and 11 of his children, was killed in an Israeli air strike last January. That strike toppled two buildings and severely damaged at least six others including this one. Al-Ameri says the cement he's using is made in Egypt and smuggled into Gaza through underground tunnels. He says the quality is inferior to Israeli-made cement which used to be plentiful in Gaza and he says this Egyptian cement costs 10 times what the Israeli cement used to cost. Al-Ameri says he's angry and Israel and Hamas.

MAHER AL-AMERI: [SPEAKING ARABIC]
TRANSLATOR: I do blame the government of the Jews and also the government here, the local government here. Because we have been living very well before the closure was imposed and we have been forced to sell our cement house and live in a rent apartment just to sustain a living.

GRADSTEIN: Most of the thousands of Palestinians displaced by the fighting have found places to live but some are still living in tents. Abd al-Rahman al-Maqusi has been living with his wife and five children in a tent in a vacant lot in northern Gaza since his home in the Jabalia refuge camp was destroyed. He says the tents fill with mice and mosquitoes in the summer and get wet during the rain of the winter.

ABD AL-RAHMAN AL-MAQUSI: [SPEAKING ARABIC]
TRANSLATOR: We were forced to stay here because there is no alternative for us to live and it has been so hard and so difficult for us to find a place to live in after the war.

GRADSTEIN: Egypt hosted a conference of donor countries in March to raise funds for the reconstruction of Gaza. The Egyptians received pledges of more than $5 billion. Adnan Abu Hasna of the United Nations Relief and Works Agency says Gazan's had high hopes for what that money would actually do.

ADNAN ABU HASNA: But actually nothing came into Gaza and these are still you know very restricted you know siege and they are not allowing building materials so it is just dreams and illusion and actually on the ground we cannot carry out any of the promises that we gave to the people here.

GRADSTEIN: Israeli foreign ministry spokesman Yigal Palmor says Israel will not allow any building materials into Gaza unless the Palestinians promise not to use the materials for weapons as they've done before.

YIGAL PALMOR: With cement they have built fortifications, bunkers, and so on. A lot of cement in the past has been diverted from civilian use to purely military use as instructed by Hamas. So if we don't have assurances that this cement will not be used by Hamas officials or by Hamas operatives but only and exclusively by international organizations for civilian purposes. As long as we don't have those assurances the cement is out.
GRADSTEIN: In a few days Palestinians in Gaza will celebrate the holiday of Eid al-Fitr which marks the end of the holy month of Ramadan. But many here see little reason to celebrate and have little hope that their situation will improve. For The World I'm Linda Gradstein in Gaza.