The EU has said it will resume paying for fuel shipments to the only power plant in the Gaza Strip on Wednesday on a provisional basis.

The bloc cut off funding on Thursday because of concerns over plans by the Islamist group Hamas, which controls Gaza, to tax electricity bills.

A senior Hamas leader denied his group had any such tax plans, and said assurances had been sent to the EU.

The row left hundreds of thousands of Palestinians without electricity.

In a statement, the EU said it would resume paying for the Gaza Generating Company's fuel supplies after receiving assurances that its officials would have greater oversight.

"In agreement with the Palestinian Authority, the [European] Commission will resume Wednesday, on a provisional basis, deliveries of fuel to the Gaza power plant," it said.

Earlier, the former Palestinian prime minister, Ismail Haniya, said the decision to withdraw funding amounted to collective punishment for the people of Gaza.

PHOTO CAPTION

Power plant in Gaza