GAZA (Reuters) - The United States on Sunday resumed the operations of the aid organizations it funds in the Hamas-ruled Gaza Strip after the Islamist group retracted its demand to scrutinize confidential documents about their work, a U.S. official said.

On Friday, USAID partner organizations stopped work after Hamas closed one of the non-governmental organizations, the International Medical Corps (IMC), when officials there denied the Islamist group access to documents. It was allowed to reopen on Sunday.

"As of August 14, USAID's implementing partners have resumed delivering assistance to the Palestinian people of the Gaza Strip," the official told Reuters.

The U.S. official, who declined to be named, said allowing access to the records could revealed financial and administrative information and details of NGOs' staff and beneficiaries.

A senior Hamas official confirmed the group had allowed the IMC to reopen and added that it had suspended its demand to audit USAID-funded groups until a mechanism could be agreed.

Palestinian-based NGOs funded by the European Union have in the past also complained of Hamas meddling in their affairs. The U.S. official based in the region had said the audits were unwarranted.

Robert Serry, the U.N. special coordinator for the Middle East peace process said in a statement he welcomed the reopening of the IMC and "recognizes the important work of NGOs in Gaza and is confident that a way forward has been reached in the interest of the people of Gaza."

The U.S. official said some 600,000 Gazans -- about a third of the population of the coastal strip -- were receiving some $98 million worth of assistance from USAID projects in health, education, construction and infrastructure.

Washington has designated Hamas as a terrorist group and it is shunned by the West for spurning permanent coexistence with Israel. The group seized control of the Gaza Strip from Palestinian President Mahmoud Abbas's Fatah faction in 2007.

Western-backed Abbas holds sway in the Israeli-occupied West Bank. Palestinians want both territories for a future state with Arab East Jerusalem as its capital.

(Writing by Ori Lewis)

Source: Reuters US Online Report World News