The Government is ploughing more than £50 million into aid for Gaza as part of efforts to prevent extremism taking hold.
International Development Secretary Douglas Alexander said the situation in the occupied territories remained "dire", a year on from the intense bombardment by Israel.
Some £41.5 million of the UK package will go on keeping basic services running with salaries for key staff, while £7 million will be spent on emergency aid to help people through the winter.
Another £5 million will be used to pay for more than 550 teachers for the United Nations Relief and Works Agency (UNRWA), which provides schooling for over 200,000 children in Gaza.
Mr Alexander said: "Better education in Gaza, free from extremist influences, is key to building the region's future.
"UNRWA is in the frontline in reversing the decline in education in Gaza. At the same time, its methods and curriculum actively promote human rights, and social and political tolerance."
He went on: "It is reprehensible to deprive ordinary people of the chance to rebuild their lives - punishing the poor and most vulnerable benefits no-one. I urge the Government of Israel to lift the restrictions on Gaza to ensure help can get through and that the new year offers new hope for thousands of people."