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Emir of Qatar Shaikh Hamad Bin Khalifa Al Thani (left) and Gaza's Hamas Prime Minister Esmail Haniya (right) arrive for the corner-stone laying ceremony for Hamad, a new residential neighbourhood in Khan Younis, southern Gaza Strip on October 23, 2012. Image Credit: AP

Rafah: Qatar's Emir Shaikh Hamad Bin Khalifa Al Thani entered the Gaza Strip on Tuesday for a visit that will raise the prestige of its isolated rulers in the Hamas movement, but disappoint Israel and mainstream Palestinian leaders in the West Bank.

Doha is increasing its investment in rebuilding Gaza to $400 million (Dh1.5 billion), up from $254 million, Gaza's Hamas premier said on Tuesday during a landmark visit by the Qatari emir.

"The emir agreed to increase the Qatari investment from $254 million to $400 million," prime minister Esmail Haniya said during a press conference in Khan Yunis in southern Gaza to mark the emir's visit.

The emir crossed into Gaza from Egypt, and was greeted and embraced by Haniya. The Qatari and Palestinian national anthems were played before an honour guard ceremony.

White and maroon Qatari flags flapped in the streets and a song called "Thank you, Qatar" was playing on the radio and on TV ahead of the visit.

In the border area, Hamas set up a large, carpeted greeting tent. Qatari and Palestinian flags and pictures of the emir and Haniyeh were hung inside the tent.

The emir's aid to the territory will bolster Hamas and help ease its economic woes. An Israeli blockade meant to weaken Hamas has hit Gaza's economy hard, though the Islamic group remains firmly in control.

During his four-hour visit, the emir will open a housing project and a hospital and will address a packed crowd at Gaza City's main soccer stadium.

Part of the aid package is a $150 million housing project near the southern town of Khan Younis. It will be built near the site of a former Israeli colony, abandoned when Israel withdrew from Gaza in 2005.

The project is called Hamad City - after the Qatari emir - and will take about two years to build.