Michael Totten offers a bit better understanding of Israel’s thinking in the blockade of Gaza. Of course, it is trying to cut off the supply of rockets, but there is also the restriction on importing construction materials and luxury goods. But aid organizations, he says, are allowed to bring these items in; only private parties are not allowed to have them. They reason that if private parties buy these things, only Hamas officials will be able to afford the luxury goods and that construction materials will go toward the military infrastructure of Hamas. On the other hand, aid organizations that buy the construction materials would be more likely to build with houses with them. Assuming that this is accurate (I have no reason to believe that it’s not), this is important information in thinking about the blockade.
Totten also provides a link to a Jerusalem Post article that describes international reaction to Israel’s recent decision, and here’s one that gives a more in-depth description of how the policy has changed. It’s a bit hard untangle, but I believe that Totten is describing the Israeli government’s thinking on the blockade both before and after the recent changes.