Qatar emir urges Palestinian unity

The emir of Qatar has been warmly welcomed as he begins his landmark visit to the Gaza Strip. (AAP)

The emir of Qatar has been warmly welcomed as he begins his landmark visit to the Gaza Strip. (AAP)

Qatar's emir has called for Palestinian unity during his landmark visit to the Gaza Strip.

Qatar's emir has called for Palestinian unity during his landmark visit to the Gaza Strip, the first to the enclave by a head of state since Hamas took over in 2007.

Gaza's Islamist rulers unfurled red carpets and recited poems in honour of Sheikh Hamad bin Khalifa al-Thani as he arrived on Tuesday to inaugurate a multi-million dollar project to rebuild the impoverished territory.

His visit was a diplomatic coup for Hamas, which has been shunned by international dignitaries since it seized the territory in 2007, ousting forces loyal to the western-backed Palestinian Authority of president Mahmud Abbas.

But the Qatari emir urged the rival Palestinian factions Hamas and Abbas' Fatah to reconcile their differences.

"It's about time Palestinians turn over the page of division and open a new chapter for reconciliation and agreement, based on the agreements in Doha and Cairo, with sincere efforts from Palestinian president brother Mahmud Abbas and head of the Hamas political bureau Khaled Meshaal," he said.

Gaza's Hamas prime minister Ismail Haniya hailed the emir's visit as a "victory" over his Islamist government's isolation.

"You are officially declaring the end of the political and economic blockade imposed on the Gaza Strip by the forces of injustice and tyranny," he told the emir.

He was referring to a political boycott as well as an Israeli blockade in place since 2006, which prevents Palestinians from bringing construction materials into the territory.

"Today we demolish the wall of the blockade through this visit, thank you Qatar!" he said.

Thousands of Qatari and Palestinian flags fluttered as the Qatari emir crossed into Gaza from Egypt and was warmly greeted by a large delegation of top Hamas officials led by Haniya and his cabinet.

He visited the Islamic University in Gaza City, where he and his wife Sheikha Moza bint Nasser received honorary doctorates, before leaving for the Rafah crossing to return to Egypt.

Last month, gas-rich Qatar said it would invest $US254 million ($A247.19 million) in rebuilding Gaza, which sustained major damage during a 22-day Israeli military operation that began in late December 2008.

But on opening a Qatari project to build 1,000 homes in the southern city of Khan Yunis, Haniya announced the emir had decided to significantly increase the initial sum.

"The emir agreed to increase the Qatari investment from $254 million to $400 million," Haniya said as Sheikh Hamad laid the foundation stone for the project named in his honour.

The increased funding would mean an extra 2,000 homes would be built in "Emir Hamad City", and would also go towards a $25 million housing project for prisoners released last year in a landmark swap deal with Israel, he said.

Besides his wife, the emir was accompanied by Qatari Prime Minister Sheikh Hamad bin Jassem al-Thani.

It is the second time the Qatari leader had visited the tiny coastal territory and it coincides with a spike in tension between Hamas and Israel.

In the morning, an Israeli soldier was severely wounded in a border bomb attack.

Two subsequent Israeli air strikes on northern Gaza Strip killed two Palestinians and wounded seven more, said a Gaza health ministry spokesman.