Israel's naval blockade of the Gaza Strip violates international law, a panel of human rights experts reporting to a U.N. body said on Tuesday, disputing a conclusion reached by a separate U.N. probe into Israel's raid on a Gaza-bound aid ship.

The so-called Palmer Report on the Israeli raid of May 2010 that killed nine Turkish activists said earlier this month that Israel had used unreasonable force in last year's raid, but its naval blockade of the Hamas-ruled strip was legal.

A panel of five independent U.N. rights experts reporting to the U.N. Human Rights Council rejected that conclusion, saying the blockade had subjected Gazans to collective punishment in "flagrant contravention of international human rights and humanitarian law".

The four-year blockade deprived 1.6 million Palestinians living in the enclave of fundamental rights, they said.

"In pronouncing itself on the legality of the naval blockade, the Palmer Report does not recognise the naval blockade as an integral part of Israel's closure policy towards Gaza which has a disproportionate impact on the human rights of civilians," they said in a joint statement.

An earlier fact-finding mission named by the same U.N. forum to investigate the flotilla incident also found in a report last September that the blockade violated international law. The International Committee of the Red Cross (ICRC) says the blockade violates the Geneva Conventions.

Israel says its Gaza blockade is a precaution against arms reaching Hamas and other Palestinian guerrillas by sea.

The four-man panel headed by former New Zealand Prime Minister Geoffrey Palmer found Israel had used unreasonable force in dealing with what it called "organised and violent resistance from a group of passengers".

Turkey has downgraded ties with Israel over the incident.

Richard Falk, U.N. special rapporteur on human rights in the occupied Palestinian territories and one of the five experts who issued Tuesday's statement, said the Palmer report's conclusions were influenced by a desire to salve Turkish-Israeli ties.

"The Palmer report was aimed at political reconciliation between Israel and Turkey. It is unfortunate that in the report politics should trump the law," he said in the statement.

About one-third of Gaza's arable land and 85 percent of its fishing waters are totally or partially inaccessible due to Israeli military measures, said Olivier De Schutter, U.N. special rapporteur on the right to food, another of the five.

At least two-thirds of Gazan households lack secure access to food, he said. "People are forced to make unacceptable trade-offs, often having to choose between food or medicine or water for their families."

The other three experts were the U.N. special rapporteurs on physical and mental health; extreme poverty and human rights; and access to water and sanitation.

French President Nicolas Sarkozy backed the creation of a "viable" Palestinian state on Monday but was cautious about repeating his foreign minister's support for possible recognition of a state before its borders were set.

Speaking at a news conference in Paris with visiting Palestinian President Mahmoud Abbas, Sarkozy repeated France's support for statehood for Palestinians but added: "We have always said a viable Palestinian state."

"What we want when we argue for a Palestinian state is a real state, which can give hope and a future for millions of Palestinians. It's not just an idea," he told reporters.

In a newspaper interview at the weekend, Foreign Minister Bernard Kouchner said that to break a stalemate in Middle East peacemaking, some countries might recognize a Palestinian state before its borders were fixed.

"One can imagine a Palestinian state being rapidly declared and immediately recognized by the international community, even before negotiating its borders. I would be tempted by that," he told the Journal du Dimanche.

Sarkozy said that Kouchner was thinking of possible ways to bring momentum to the peace process but that France's goal remained a functioning Palestinian state in clearly set borders.

"In Bernard's comments, there was the thought that if we don't manage that, then when the time comes, in accord with our Palestinian friends, we might underline the idea of this state politically, to lift it up a notch in a way," he said.

"But the objective is the idea of a Palestinian state in the frontiers of 1967, with an exchange of territory, just as we have said all along."

'Geopolitical conditions are ripe'

The Ramallah-based Palestinian leadership said last year it would seek UN Security Council backing for a Palestinian state based on 1967 borders, referring to the West Bank and Gaza Strip borders as they were on the eve of the 1967 Middle East war.

It said the initiative would not be a unilateral declaration of statehood but would aim to secure international support for the eventual creation of a state based on the 1967 borders.

Sarkozy said that if any such initiative were launched, "we would see what we would do" but that it was up to the Palestinians to decide how they wished to proceed.

Israel has sharply criticized the idea of any unilateral initiative and says only negotiations can produce results.

But there has been growing speculation in Israel that the Palestinians are looking for ways around direct talks which have been suspended for over a year.

A think-tank close to the Israeli government says the Palestinians "have largely abandoned a negotiated settlement and instead are actively pursuing a unilateral approach to statehood" with serious implications for Israel.

"Palestinian unilateralism is modeled after Kosovo's February 2008 unilateral declaration of independence from Serbia," said a recent paper by Dan Diker of the Jerusalem Center for Public Affairs.

The EU and the United States recognized the independence of Kosovo without the support of a Security Council resolution. Palestinian leaders now believe "geopolitical conditions are ripe" to follow that path, Diker said.

Ismail Haniyeh, prime minister of the Islamist movement's government in the coastal enclave, said other armed groups in the Gaza Strip should observe what has amounted to a ceasefire since Israel's major offensive a year ago. That, Haniyeh said, was in the interests of protecting Gazans from Israeli attacks.

Monday, Israel's defense minister had warned Hamas to rein in its allies "or else" -- a threat of more Israeli action.

Rocket fire by smaller groups Islamic Jihad and the Popular Resistance Committees, and Israeli air strikes that killed several Palestinians, made the past two weeks among the most violent since the three-week war that killed 13 Israelis and over 1,400 Palestinians before a ceasefire in mid-January 2009.

"We call upon Palestinian factions to intensify their meetings in order to reinforce the national agreement and to work in a joint spirit to protect our people and to protect our interests and to block any possible Israeli aggression against our people," Haniyeh said before a cabinet meeting in Gaza.

Despite denials from some of the smaller groups, Hamas has insisted lately there was an agreement to hold back on attacks.

EGYPTIAN RELATIONS

While hostility between Hamas and Israel is the norm, the Palestinian Islamist movement has also been concerned of late over a deterioration in relations with Egypt, which controls the short southern border of the Gaza Strip.

Already frustrated in its efforts to promote reconciliation between Hamas and the rival Fatah party of West Bank-based Palestinian President Mahmoud Abbas and by its difficulties in brokering a prisoner swap between Hamas and Israel, Cairo was angered last week by the death of a soldier at the Gaza border.

He was shot during clashes when Hamas supporters rallied at the frontier in the town of Rafah to protest at Egyptian efforts to stem supplies reaching Gaza through secret tunnels.

Egyptian officials have said the soldier was hit by a bullet fired from the Palestinian side. Hamas spokesman Sami Abu Zuhri said Tuesday there was evidence the Egyptian border guard could have been hit by a bullet from his own side.

Whatever the case, Haniyeh said, Hamas was working in good faith to clarify what happened and to protect relations with Cairo: "We are carrying out an investigation ... (which) aims to arrive at the truth and to put measures in place that ensure Palestinian-Egyptian relations are protected."

Cairo has long had cool relations with Hamas, which shares roots with the banned Egyptian opposition movement the Muslim Brotherhood. But Egypt, the first Arab state to make peace with Israel, is also keen to avoid being portrayed as an ally of the Jewish state in its conflict with the Palestinians.

(Editing by Alastair Macdonald and Tim Pearce)

Hamas said on Sunday the Islamist group was in the final stages of reconciling with the rival Palestinian Fateh Party after its leader met Saudi officials to try to narrow the rift.

"We made great strides towards achieving reconciliation," Hamas leader Khaled Mishaal told reporters at the Saudi foreign ministry during a visit to Riyadh. "We are in the final stages now."

An Egyptian proposal to promote reconciliation between Hamas and Palestinian President Mahmoud Abbas' Fateh group has called for presidential and legislative elections to be held in the West Bank and Gaza Strip next June.

Mishaal said Hamas still had some points to resolve in the Egyptian proposal.

Azzam Al Ahmad, a senior Fateh official, said Fateh had already endorsed the Egyptian proposal and it was up to Hamas to either follow suit or reject it.

"We urge Hamas to sign it so that we begin implementing the agreement," Ahmad told Reuters.

Mishaal's meeting with Saudi Foreign Minister Prince Saud Al Faisal was designed to help reconciliation of the feud, Saudi officials said.

Another senior Fateh official, Zeyad Abu Ein, said Mishaal was trying to put on a good face in Saudi Arabia.

"Khaled Mishaal did not come with anything new. The Palestinian people and Fateh are waiting for Hamas to sign on the Egyptian paper for reconciliation to take place," he said.

Egyptian barrier

Mishaal said Hamas wants Saudi Arabia to play a special role alongside Egypt and other Arab countries to unify the Palestinian position and also to prompt Arabs to confront the Israeli government.

It was the first known meeting between Saudi and Hamas officials since Saudi Arabia brokered the Mecca Agreement in 2007 between Hamas and Fateh.

After the Mecca agreement, Hamas drove the Fateh movement out of the Gaza Strip. Abbas' Palestinian Authority runs the Israeli-occupied West Bank.

Israel pulled out of the cramped Mediterranean Gaza enclave in 2005, then launched a military offensive against it in late 2008 in which hundreds of Palestinians were killed and key infrastructure destroyed.

Mishaal's meeting with Saudi officials took place ahead of an expected visit by the US presidential envoy for the Middle East, George Mitchell.

Saudi officials say Iranian support for Hamas has widened the rift with Fateh and hampers a resumption of peace talks.

"This meeting should dissipate doubts about roles being played in our region," Saudi Arabia's Faisal said. "We must clarify the picture, especially to Palestinian officials, and also understand from them what are their orientations and goals."

A Western diplomat said Hamas also hopes Riyadh will convince Cairo to abandon a plan to build an underground barrier along its border with the Gaza Strip.

Hamas calls the project a "wall of death" that could seal an Israeli-led blockade by smothering smuggler tunnels from the Egyptian Sinai Peninsula.

"The wall could turn the table on Hamas," the diplomat said.

Hamas does not recognise Israel's right to exist and opposes the Fateh strategy pursued by Abbas of seeking to negotiate a permanent peace deal.