Israel has authorized construction of the 1,200 new homes and 18 badly needed schools in Gaza, in what would be one of the largest housing projects in the seaside territory in years, according to The Associated Press.

UNRWA spokesman Chris Gunness said Wednesday that the test of Israel’s decision would be whether it allows thousands of trucks to ferry building material into Gaza’s border town of Rafah, where the houses are to be built.

The Israeli military said it had no objections to Saudi funding for the project, as long as international groups were overseeing the construction.

Meanwhile, Palestinian Prime Minister Salam Fayyad on Wednesday commended the support of Saudi Arabia to the Palestinian people.

Fayyad denounced Arab and Palestinian media reports that quoted top Palestinian officials as saying that Saudi Arabia “did not fulfill its financial obligations to the Palestinian Authority (PA).”

The Palestinian premier said: “PA received from our brothers in Saudi Arabia $750 million between 2007 and 2010.”

He added that this financial aid from Saudi Arabia was to the Palestinian treasury and not for humanitarian purposes. Fayyad said that Saudi Arabia extends humanitarian aid to the Palestinian people through regional and international donor institutions.