RAMALLAH, WEST BANK — Israel needs to do more to ease its blockade of Gaza and allow exports from the Hamas-ruled territory, international Mideast envoy Tony Blair said in an interview Sunday, after meeting with the Israeli prime minister.

The former British prime minister told the Associated Press that he hopes to see progress soon, noting that exports are crucial for reviving Gaza's battered economy. "There has been significant change in Gaza, but not nearly as much as we need," he said.

Israel and Egypt sealed Gaza's borders after the violent takeover of the territory by the Islamic militant Hamas in 2007, allowing in only basic humanitarian goods.

In June, in an attempt to defuse international criticism over its deadly raid of a Gaza-bound flotilla, Israel eased the embargo. It now allows in most consumer goods, but has continued to restrict the import of most construction supplies and key raw materials, and banned virtually all exports.

Israel argues that Hamas could use cement and steel for military purposes, and that the infrastructure isn't in place yet at Gaza's single crossing for trade with Israel, Kerem Shalom, to safely monitor exports.

However, Gaza economists and human rights groups argue that the initial easing of the blockade has not sparked sustained growth. Gaza unemployment remains above 30 percent. Both the construction industry and exports of Gaza-made textiles, furniture and agricultural projects are pillars of the Gaza economy.

Blair, who was instrumental in negotiating the easing of the closure in June, said he raised the issue with Israeli Prime Minister Benjamin Netanyahu on Sunday.

"I hope that in a short space of time, we will get some progress there, because a functioning private sector in Gaza is important," he said. "It is important for the economy of Gaza, but it is also important for the people there."

Blair said Gazans, most of whom receive some aid, don't want handouts. "They want to run their own affairs properly," he said.

Maj. Gen. Eitan Dangot, the Israeli general who controls access to Gaza, told AP last month that he eventually hopes to permit exports, but wants to prevent Hamas from getting credit for any progress. His spokesman, Maj. Guy Inbar, said Sunday the plan is to start allowing exports, in a gradual fashion, in the spring. But security measures, including cargo scanners, would have to be in place, he said.

On Sunday, Israel allowed small shipments of strawberries and carnations to be exported from Gaza, the first of the season. Such seasonal shipments were permitted even at the height of the blockade, as part of an arrangement with the European Union.

Blair, meanwhile, expressed concern that projects he has been promoting, such as industrial parks and the first planned Palestinian city in the West Bank, are too often held up whenever there is an impasse in Israeli-Palestinian peace talks. The planned city, Rawabi, has been on hold for a year because Israel has not given the go-ahead for paving a short access road through an Israeli-controlled area.

"I think this got all somewhat bound up in the political discussions and negotiations," Blair said, adding that he was hopeful there would be movement on the Rawabi project soon.

"What you can't have is a situation, and this is frankly something that worries me at the moment, you can't have a situation where every time there is a political impasse, everything else stops," he said.

Netanyahu's office declined comment on Sunday's meeting with Blair.

While isolating the Hamas government in Gaza, Israel has been trying to talk peace with the rival Palestinian government in the West Bank. Talks have been stalled since late September.

The Palestinians hope to establish an independent state in the West Bank and Gaza, which lie on opposite sides of Israel, but their internal divisions are a major obstacle.

On Sunday, Hamas prevented two advisers to Palestinian President Mahmoud Abbas, the group's West Bank-based rival, from entering Gaza. Hamas police spokesman Ihab Ghussein said the ban came after Abbas' forces began a new arrest campaign of Hamas loyalists in the West Bank.

Also Sunday, Israel's Dan bus company said pressure from pro-Palestinian groups forced French multinational Veolia to drop out of an Israeli light rail project that cuts into east Jerusalem.

Veolia disputed the assertion, which would bolster an international campaign to boycott companies supporting Israel's occupation of the West Bank and east Jerusalem. It said its decisions were based solely on financial considerations.

Veolia originally had planned to sell its 5 percent stake in the project to Israeli company Dan bus lines, but later sold it to a rival. Dan is now suing Veolia.