The United Nations will quickly raise money for emergency repairs in the Gaza Strip, the world body's humanitarian chief promised Thursday after witnessing what he called shocking destruction from the three-week war between Israel and Hamas.

But U.N. aid chief John Holmes and another senior U.N. official acknowledged they have no fallback plan if reconstruction is snagged by the power struggle between Gaza's militant Hamas rulers and their moderate Palestinian rivals in the West Bank.

Hamas, which seized power in Gaza by force in June 2007, insisted Thursday that it will not share control over reconstruction projects that initial estimates have said could cost up to $2 billion.

The international community, however, is reluctant to funnel huge sums to Hamas, calling for the group for the group to form a joint government with Palestinian President Mahmoud Abbas. Prospects for such a deal remain slim.

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Israel has said one of the key objectives of its offensive against Hamas was to halt weapons smuggling. Hamas has fired thousands of rockets at southern Israel over the past eight years, and Israel says most of the weapons and explosives came in through smugglers' tunnels from Egypt.

Any cease-fire deal will be durable only if the basic demands of both sides are met. Israel insists on anti-smuggling guarantees, while Hamas wants open Gaza borders to ensure delivery of vital supplies.

President Barack Obama addressed both stands Thursday, saying his administration supported implementation of a "credible" system for stopping smuggling and calling for Gaza's borders to be opened for aid shipments, with "appropriate monitoring." He said Hamas must stop attacking Israel.

Hamas criticized Obama's comments, saying his approach will bring the U.S. failure in the region.

"Obama is still on the same path as previous leaders and also will make the same mistakes as Bush that ignited the region instead of bringing stability," Osama Hamdan, the Hamas spokesman in Beirut, Lebanon, told Al-Jazeera television.

Holmes and Robert Serry, the U.N. envoy for the Middle East peace process, toured some of Gaza's most damaged areas Thursday, including a small industrial zone in the Jebaliya refugee camp.

"What I saw was actually more shocking than I expected, both in its extent and its nature," Holmes said, speaking at a U.N. compound that was damaged on the second day of Israel's offensive when an airstrike hit an adjacent guest house of the Palestinian government. The strike damaged the roof of Holmes' local office and four U.N. jeeps.

Holmes said he was asked by the U.N. secretary-general, who visited Gaza this week, to assess Gaza's initial needs, including emergency repairs of the water, sewage and electricity systems.

The U.N. would start raising funds in about 10 days, he said, but added that reconstruction will be possible only if the Palestinians form a unity government.

Asked what would happen if a unity deal is not reached, Holmes said: "I cannot answer that question in a sensible way."

In the West Bank, Abbas' prime minister, Salam Fayyad, said representatives of donor countries would meet in Egypt in mid-February to discuss Gaza reconstruction and he urged Hamas to consider a joint government.

"The world would like to help us, but everyone says that we should have a national unity government," Fayyad said.

Hamas officials in Gaza were cool to the idea of reconciliation talks with Abbas' Fatah movement.

And while eight Syria-based radical Palestinian factions, including Hamas, called for talks, they also said they would insist on "continuity of resistance" to Israel. That condition appeared to preclude any agreement with Abbas, who seeks a peace deal with the Jewish state.

Hamas has gone out of its way to demonstrate control in Gaza since a tentative truce took hold Monday after Israel's three-week offensive. Hamas put on victory rallies with demolished buildings as backdrops, and its ministers of health, construction and education held news conferences to present plans for emergency relief.

Starting Sunday, the Hamas government will distribute $52 million to the needy, spokesman Taher Nunu said, adding that the money was coming from the movement's supporters.

Despite a border blockade enforced by Israel and Egypt since Hamas seized power, the group has brought cash and weapons, along with commercial goods, through smuggling tunnels under the Gaza-Egypt border.

Israel dropped hundreds of tons of bombs on the tunnels during the fighting, saying it destroyed 60 percent to 70 percent of them.

Smugglers said Thursday only about a tenth of the tunnels were intact. Yet they were back at work, starting repairs and lugging sacks of goods like potato chips, clothes and cigarettes.

One tunnel collapsed Thursday, badly injuring a Palestinian, Egyptian security officials said.

Israeli media, meanwhile, said some Cabinet ministers were indicating a new willingness to hand over dangerous Palestinian prisoners in exchange for the return of an Israeli soldier captured in 2006, Sgt. Gilad Schalit.

There was no comment from Hamas, which has demanded the release of hundreds of prisoners, including convicted murderers, in exchange for Schalit, who was seized by Hamas-linked militants in a cross-border raid.

The Popular Resistance Committees, one of the groups involved in Schalit's capture, called the reports of Israeli flexibility "a new victory."

"Our demand is still the same, that all Palestinian prisoners which we have asked for be released and we emphasize the fact that releasing prisoners is at the top of our priorities," said Abu Mujahid, a spokesman for the group.

Many Palestinian families have relatives in Israeli jails and prisoner releases are of supreme importance in Palestinian society. Israel holds some 10,000 Palestinian prisoners in all.