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Israel severed all contact with Gaza Strip banks after Hamas drove out forces loyal to Western-backed Palestinian president Mahmud Abbas in June 2007, fearing the money would go to the coffers of Hamas.
The move effectively ended social payments to those Palestinians who had earned benefits working in Israel.
To circumvent dealing with Gaza banks, Israel would give the money to the Palestinian Authority in Ramallah, which would then transfer it to Gaza, the statement said.
The decision to resume the payments was a "humanitarian gesture," it added.
Israel and Egypt have sealed Gaza off from all but vital goods since the Islamist movement seized power.
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The move effectively ended social payments to those Palestinians who had earned benefits working in Israel.
To circumvent dealing with Gaza banks, Israel would give the money to the Palestinian Authority in Ramallah, which would then transfer it to Gaza, the statement said.
The decision to resume the payments was a "humanitarian gesture," it added.
Israel and Egypt have sealed Gaza off from all but vital goods since the Islamist movement seized power.
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