WASHINGTON ( CNN ) -- The U.S. has restored Fulbright scholarships to seven Gaza-based students , saying it erred last week when it rescinded the awards because of travel restrictions that Israel imposes on the Palestinian territory . Student Hadeel Abukwaik , 23 , says she hopes to have an exit visa to leave Gaza for the U.S. by August . In e-mails to the students on Sunday , the U.S. Consulate in Jerusalem said the United States was working with Israeli authorities to let them leave the Hamas-ruled zone to study at American universities . The scholarships were reinstated after Secretary of State Condoleezza Rice expressed outrage about the initial decision , State Department spokesman Sean McCormack said Monday . McCormack said the initial decision was partly the result of a `` faulty decision-making process '' by the State Department . `` The secretary saw it when it got to her level . She said , 'Fix it , ' '' McCormack said . `` We hope that it has been fixed and that we are working with the Israelis to get these exit permits so that these individuals , again , can have a visa interview . '' Watch how the students learned about the scholarship loss » . U.S. officials had said the scholarships were rescinded because Israel had denied them exit visas . But McCormack said Monday that U.S. authorities did not take up the matter with Israel until after the matter became public . Israel , which has been criticized for banning hundreds of students from leaving Gaza to study abroad , said it considers each application individually . Israeli government spokesman Mark Regev indicated Sunday that his country would be willing to grant the students visas . `` This can happen , '' Regev said . `` No one has to pressure Israel on this issue . We have an interest . A real interest . '' Citing security concerns , Israel imposed an embargo on the movement of people and goods from Gaza after Islamic militant group Hamas took over the territory last year . Palestinians can leave Gaza only with Israeli permission . Hamas has refused to recognize Israel 's right to exist , and Israel , the United States and the European Union have designated it a terrorist organization . McCormack said the seven Gaza Fulbright students must be interviewed by Israeli authorities before they can get visas to the United States . `` Should they have a successful visa interview -- and by law I ca n't prejudge an outcome of a visa interview -- then they would be able to come to the United States and pursue their program , '' he said . If the seven are allowed to leave , it would be the first time Israel has let students do so from Gaza since January , according to Palestinian advocacy group Gisha . One of the Gaza Fulbright scholars , Hadeel Abukwaik , 23 , said she `` laughed like crazy '' from sheer joy when she received Sunday 's e-mail . `` I was really hoping for this , but I did n't want to want it too much , '' the software engineering student said by phone Monday . `` I did n't want to be disappointed again . `` This is really good news . '' Fulbright scholarships are awarded on the basis of academic merit and leadership potential under the U.S. government-funded Fulbright program , which was started in 1946 . The scholarships allow U.S. citizens and foreign nationals to study and teach abroad to promote the `` mutual understanding between the people of the United States and the people of other countries of the world . '' More than 279,000 participants have been chosen for Fulbright scholarships . Abukwaik said the e-mail she received Sunday gave no indication about when the students might be able to travel . She is waiting to hear back from several universities , including ones in California and Florida . She said academic programs start in August and she hopes to have a visa to leave Gaza by then . CNN 's Atika Shubert in Gaza City and Elise Labott in Washington contributed to this report .
NEW : State Department says U.S. erred when it rescinded scholarships . U.S. tells students it is trying to persuade Israel to let them leave Gaza . U.S. cited Israeli travel restrictions on territory when it rescinded awards last week . Comment: