"It was agreed to liberalise the system by which civilian goods enter Gaza (and) expand the inflow of materials for civilian projects that are under international supervision," an official statement said, without specifying any product list.
The announcement appeared to indicate that Israel would allow international organisations, such as the United Nations, to import previously banned building materials, vital to reconstruction after the December 2008-January 2009 Gaza war.
The security cabinet, which began its discussions on Wednesday on easing the embargo, noted that "existing security procedures to prevent the inflow of weapons and war material" would continue.
The announcement made no mention of any lifting of Israel's sea blockade of the enclave, run by Hamas.
Israel faced mounting international calls to ease or lift its Gaza embargo following the killing by Israeli commandos of nine pro-Palestinian Turkish activists during the interception in international waters of an aid convoy on May 31.
Israeli leaders said the troops acted in self-defence after being swarmed by activists who attacked them, and that the blockade is necessary to prevent arms smuggling to Hamas.
Israel imposed the blockade soon after Hamas won a Palestinian legislative election in 2006. Restrictions were tightened after Hamas seized power in Gaza the following year.
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