Israel has announced it will ease the land blockade of the Gaza Strip and allow more civilian goods to enter the Palestinian territory.
It comes amid growing international pressure to end the embargo.
An Israeli commando raid on an aid flotilla attempting to break the naval blockade of Gaza last month was widely condemned.
Israel and Egypt tightened the blockade after the Islamist Hamas movement took control of Gaza in 2007.
The decision to ease the blockade, agreed by Israel's security cabinet after a two-day meeting, will see the expansion of the number of products Israel will allow into Gaza via border crossing points, including construction materials.
The naval blockade will remain in place.
Israeli Prime Minister Benjamin Netanyahu's office said in a statement that Israel would: "liberalise the system by which civilian goods enter Gaza"; "expand the inflow of materials for civilian projects that are under international supervision"; and "continue existing security procedures to prevent the inflow of weapons and war material".
It added: "The cabinet will decide in the coming days on additional steps to implement this policy."
It also said that Israel expected the international community to work toward the immediate release of Gilad Shalit, an Israeli soldier captured by Hamas fighters on the Israeli-Gaza border in 2006.
Israel says the blockade - which aims to put pressure on Hamas and secure the release of Sergeant Shalit - prevents war material entering Gaza while allowing the entry of humanitarian aid.
It has been widely criticised as "collective punishment" of the 1.4 million residents of Gaza.
Nine Turkish activists died in the Israeli commando raid on the Gaza-bound flotilla in international waters on 31 May.
It was the ninth attempt since 2008 to break the blockade by sea, but the first that resulted in bloodshed.