Israel is to pay $US10 million in compensation for damage caused to United Nations buildings in Gaza during an offensive against Hamas a year ago.
The BBC reports it 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 payment is for collateral damage.
Israel also says Hamas fighters operated in or near UN-protected buildings during the offensive.
Israeli officials say that the settlement should be viewed as a good-will gesture.
Defence Minister Ehud Barak personally notified Ban Ki-Moon of the decision.
According to the United Nations, the offensive left more than 50,000 houses, 800 industrial properties and 200 schools damaged or destroyed, as well as 39 mosques and two churches.