SHARM EL-SHEIKH, Egypt (Reuters) - Palestinians hoping to raise $2.8 billion to rebuild Gaza at a conference in Egypt on Monday will find the path to reconstruction blocked by political and logistical factors, relief agencies say.

Egypt, which called for the gathering soon after Israel halted its Gaza offensive in January, says leaders from some 70 countries will attend including the presidents of France and Italy, and foreign ministers from Britain and the United States.

But the Islamist Hamas movement which runs Gaza is not invited. Donors will seek to ensure no money reaches the group, and there is no guarantee that Gaza’s borders will be opened to let sufficient supplies flow in.

Israel’s 22-day assault on Gaza, which it said aimed to suppress Palestinian cross-border rocket fire, killed more than 1,300 Palestinian and destroyed or damaged thousands of buildings across the coastal enclave.

More than a month after Israel and Hamas announced separate ceasefires, little long-term reconstruction has taken place and the aid is barely enough to keep residents fed and temporarily housed, the agencies said.

“At the moment we are not getting in anywhere near the amount of aid that we need,” said Juliette Seibold, policy and advocacy adviser for CARE International.

“The work we are doing is very much focused on helping people tread water until the real assistance arrives,” she said.

Some 15,000 houses were damaged or destroyed in the three-week offensive, according to the Palestinian Authority (PA), which will present a recovery plan to the conference.

The PA hopes to raise $2.8 billion, after initial independent estimates put the cost at $2 billion.

In the Saudi capital Riyadh, Gulf Arab foreign ministers said their countries planned to pledge $1.65 billion in aid over a period of up to five years to rebuild Gaza. They said other Arab countries could join their plan.

But any money pledged will face an obvious difficulty: reaching Gazans.

“The issue for Sharm el-Sheikh will be frankly as simple as: ‘Can we actually get cash inside Gaza to make the economy work?’,” said Michael Bailey, spokesman for Oxfam International.

“The fundamental problem is that Israel will not allow adequate flows of materials or people into Gaza,” he said.

The West shuns Hamas because it refuses to recognize Israel, renounce violence and commit to interim peace deals between Israel and President Mahmoud Abbas’s Palestinian Authority.

Israel tightened its grip on Gaza’s border crossings after Hamas took control in June 2007, and says it will closely manage Gaza reconstruction by requiring project-by-project approval and guarantees that projects will not benefit Hamas.

Since the war ended on January 18, Israel has not allowed in many materials deemed of dual use -- useful for both civilians and militants -- including cement and steel rods.

“We will not allow Hamas to build new bunkers or use piping to build missiles,” said Peter Lerner, spokesman for Israel’s coordinator of activities in the Palestinian territories.

But Oxfam’s Bailey said Israel has cast a very wide net.

“We are talking about very simple things,” he said. “Since the war there has been no pasta, no lentils and no fruit juice allowed into Gaza. There is no way in anybody’s imagination that these are dual use items.”

Human Rights Watch said Israel continues to block goods from entering Gaza via the sophisticated Karni crossing near Gaza City. Instead, trucks are routed to Kerem Shalom near Gaza’s southern tip, where a $1,000 per truck handling fee applies.

Daly Belgasmi, the regional director of the U.N.’s World Food Program (WFP), said: “It’s quite challenging ... but we are working closely with Israel to coordinate our movement.”

The United States is expected to pledge more than $900 million at the conference, but Secretary of State Hillary Clinton also stressed that any aid must not benefit Hamas, which the U.S. deems a terrorist organization.

“I will be announcing a commitment to a significant aid package, but it will only be spent if we determine that our goals can be furthered rather than undermined or subverted,” Clinton told Voice of America in an interview taped on Friday.

The Palestinians began a long-awaited dialogue in Cairo on Thursday aimed at forming a unity government that can oversee the Gaza reconstruction.

Those steps hit a snag on Saturday when Abbas called for any unity government to seek a two-state solution, which Hamas immediately rejected.

($1=4.194 Israeli Shekel)