GAZA, April 24 (Xinhua) -- The United Nations Relief and Work Agency (UNRWA) on Tuesday inaugurated a housing project, funded by the Netherlands, to reside 1,300 Palestinian homeless in southern Gaza Strip town of Khan Younis.

The UNRWA said in a press statement that the houses, funded by a 7.2-million-U.S. dollar donation from the Dutch government, will provide shelter to 1,300 Palestinians in western Khan Younis refugee camp.

UNRWA Commissioner General Filippo Grandi said during the inaugurating ceremony of the project that "This contribution does more than rebuild(ing) homes, it rebuilds lives."

"These projects are the outcome of the efforts to lift the Israeli blockade imposed on the Gaza Strip," said Grandi, who called the Israeli blockade "illegal," adding "It must be immediately lifted."

The UNRWA is one of the few international agencies that is able to bring construction raw-materials into the coastal enclave. Grandi urged Israel to allow more supplies to replace unsafe structures in the camps.

Meanwhile, Birgitta Tazelaar, diplomatic representative of the Netherlands to the Palestinian National Authority (PNA), said during the ceremony in western Khan Younis that her country " encourages Israel to provide UNRWA with an additional exemption to finish the remaining construction work as soon as possible."

"This would allow for an additional 521 housing units," she said.

The donation will also fund roads, water infrastructure and an electricity network in Khan Younis. The refugee camp suffers from overcrowding and poverty, the UNRWA statement said.