The United Nations, Israel and the Palestinian Authority have reached a deal to allow reconstruction work to begin in the war-torn Gaza Strip with UN monitoring of the use of materials, UN Middle East envoy Robert Serry said on Tuesday.

The Coordinator for Government Activities in the Territories confirmed that Israel had agreed to the United Nations mechanism. The mechanism will enable the rehabilitation of the Strip while preserving security interests," COGAT said in a statement.

Serry told the UN Security Council that the United Nations had brokered the deal "to enable work at the scale required in the strip, involving the private sector in Gaza and giving a lead role to the Palestinian Authority in the reconstruction effort, while providing security assurances through UN monitoring that these materials will not be diverted from their entirely civilian purpose."

Fifty days of conflict in Gaza between Hamas militants and Israel, which ended late last month, has left swathes of the Mediterranean enclave in ruins.

The Palestinian Authority said in a study recently that the reconstruction work would cost $7.8 billion, two and a half times Gaza's gross domestic product, including $2.5 billion for the reconstruction of homes and $250 million for energy.