Israel will pay US $10 million in compensation for damage caused to United Nations buildings in Gaza during the assault a year ago, officials have said.

This will be the first compensation paid by Israel for damage caused during the Gaza offensive.

UN storehouses, school buildings, offices and vehicles were damaged or destroyed during the conflict.

Israel insists UN sites were not targeted during the offensive and says the payout is for collateral damage.

Israel also says that Hamas fighters operated in or near UN-protected buildings during the offensive.

The payout is a result of several months negotiation. A UN inquiry in May last year found that Israeli forces had, on seven occasions, "breached the inviolability of United Nations premises" and were responsible for deaths and injuries.

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