The emir of Qatar delivered a stunning diplomatic coup for Hamas yesterday with a historic visit to Gaza.

Sheikh Hamad bin Khalifa Al Thani's visit was the first by an Arab leader since the Islamist movement seized power in 2007.

It underlined Qatar's growing influence in the region, defied Israel's blockade of Gaza and signalled the growing influence of the Muslim Brotherhood , Hamas's parent movement.

The emir announced an increase in Qatar's grant to Gaza from $254 million (Dh932m) to $400m. Along with his wife and a delegation of 60, he toured a number of projects being financed by the grant.

The aid will go towards rebuilding homes damaged during Israel's three-week war in Gaza that began in December 2008 and killed up to 1,400 Palestinians, and will help to pay for a hospital for Gazans who have lost limbs.

The Qatari leader was embraced by Hamas's prime minister, Ismail Haniyeh, at a new housing project in the city of Khan Younis. Mr Haniyeh declared that the visit had "broken and defied" Israel's blockade on Gaza.

Riding the momentum of election victories by Islamists Arab Spring countries, Hamas had touted the visit as a triumph over Israel and the group's main Palestinian rival, Fatah.

"This is a historic visit and a diplomatic failure of Israel and its allies, especially Fatah," Mahmoud Zahar, a founding member of Hamas, said yesterday. "Now the stage has been set for leaders of other countries to come here and break the blockade."

Fatah officials in the West Bank fear the visit will give Hamas a lift in their feud and make the split between the two territories more permanent, but in a speech at Gaza's Islamic University last night the emir urged the factions to reconcile.

"Why are you staying divided?" he said. "There are no peace negotiations, and there is no clear strategy of resistance and liberation. Why shouldn't brothers sit together and reconcile?"

Gazans hoped the emir's visit and Qatari financing would finally end years of an Israeli blockade that has crippled their economy.

"This is a precedent because if other leaders follow him, the siege will be over and we can finally begin to live normal lives," said Bashir Matar, 47, who owns a catering service in Al Shati refugee camp.

The emir arrived at the Gaza border in an Egyptian government helicopter, unthinkable during the rule of the former Egyptian president Hosni Mubarak.

Israeli officials criticised the emir's visit, though Qatar has maintained the warmest relations of any Arab nation with Tel Aviv.

"No one understands why he would fund an organisation which has become notorious with committing suicide bombings and firing rockets on civilians," said Israel's foreign ministry spokesperson, Yigal Palmor. "By hugging Hamas, the emir of Qatar is really someone who has thrown peace under the bus."

Analysts have called the Qatari support a reward for Hamas's decision to sever ties with the Syrian regime of Bashar Al Assad , Iran and the Shiite Hizbollah movement in Lebanon. Hamas dismantled its Damascus headquarters last year, placing the group more firmly in the orbit of Sunni Arab states and Arabian Gulf monarchies.

The visit was also the latest expression of Qatari prowess in Middle East diplomacy, analysts say.

But while Fatah's chairman and the PA president, Mahmoud Abbas , has publically welcomed Qatari support, the visit has upset many in the faction. It issued a general statement on Monday demanding Palestinians boycott the visit, saying that looking for "political power in the region at the expense of the Palestinian people and their rights and unity is unacceptable".

Doha assumed a prominent role in trying to mend differences between Hamas and Fatah after the parties brokered a landmark reconciliation accord in May last year. But after Hamas's outgoing leader, Khaled Meshaal, and Mr Abbas signed another reconciliation agreement in the Qatari capital in February, the factions were unable to resolve their differences.

Nathan Thrall, the Jerusalem-based analyst for the International Crisis Group, said Hamas was using the visit to drive home its self-proclaimed victory over Fatah in the bid to win Arab and international support.

Hamas, which officially calls for Israel's destruction, offers itself as a pious platform of violent resistance, and an alternative to Fatah's attempts to negotiate peace with Israeli leaders.

"It's a bigger-picture argument: Hamas is trying to portray a picture where 'the Arabs aren't giving a dime to the PA in Ramallah but they're giving hundreds of millions of dollars to us, and now they see we are the future'," Mr Thrall said.

The western-backed PA is facing a financial crisis - in part because donor countries have not delivered promised aid.

Hani Habib, a columnist at the Fatah-linked Al Ayyam newspaper, expressed concern that the emir's visit had all but convinced Hamas to drop reconciliation efforts with Fatah. This, he warned, would serve Israel's interests by strengthening Hamas control over Gaza while keeping the territory politically divided from the West Bank.

"Israel wants Hamas in Gaza because it's powerful and it has kept with it a ceasefire, so in a way the Israeli government sees Hamas as the keeper of its security," he said.