The United States is preparing to donate some $900m (£621m) for Gaza, an Obama administration official said.
The aid would not go to Hamas, the group that controls the territory, but it would help the Palestinian Authority, the official added.
It comes as the US Secretary of State Hillary Clinton prepares to attend a Palestinian donors' conference.
Any US aid would have to be approved by Congress, where some are wary that funds could still end up with Hamas.
The donors' conference in Egypt next week will discuss humanitarian and reconstruction needs in the Gaza Strip after Israel's recent military offensive.
Two separate Palestinian surveys have put the cost of the damage at just under $2bn.
Without power
The US official spoke anonymously because the donation has not received final approval and he was not authorised to talk about it before it was announced by Mrs Clinton.
The US secretary of state will travel to Egypt for the conference, which is being held next Monday.
Later that week she will visit Israel, according to officials in Jerusalem, for her first trip to the region in her new role.
She is also expected to visit the West Bank. Although she is unlikely to go to Gaza, a US official said.
The US considers Hamas a terrorist organisation and refuses to deal with the group but it recognises the West Bank-based Palestinian Authority President Mahmoud Abbas.
The aid would go to nongovernmental and UN organisations, with some going to the Palestinian Authority, the official said.
Around 1,300 Palestinians, of whom 412 were children, were killed during the Israeli offensive on Gaza; 21,000 homes were destroyed or badly damaged. Thirteen Israelis were killed during the three weeks of violence.
In its latest report, the UN says 90% of Gaza's 1.5m residents have intermittent electricity, while 50,000 people do not have access to piped water.
Israel meanwhile continues to keep Gaza's borders closed, allowing in only essential supplies.
Hamas has called for the reopening of the crossings as part of on-going Egyptian truce talks but Israel says there first needs to be an end to rocket fire from the territory, plus a halt to the smuggling of weapons and the release of a captive Israeli solider.
