.htaccess very much exists, contrary to gallery

In gallery config I'm getting the error:

Error: You must create empty file .htaccess and chmod it 777 before proceeding. See [documentation] for more details.

but at the same time a quick ls shows:

ft7d:/usr/share/gallery# ls -l -a
total 872
drwxr-xr-x 21 root root 4096 Jul 2 22:58 .
drwxr-xr-x 127 root root 4096 Jul 2 22:53 ..
-rwxrwxrwx 1 root root 0 Jul 2 22:57 .htaccess <========
-rw-r--r-- 1 root root 1 Jul 2 22:57 .htaccess~
-rw-r--r-- 1 root root 1543 Apr 13 19:29 AUTHORS
-rw-r--r-- 1 root root 45657 Jun 1 10:40 ChangeLog
-rw-r--r-- 1 root root 67129 Feb 17 16:13 ChangeLog.archive.gz
-rw-r--r-- 1 root root 18064 Jun 26 2003 LICENSE.txt
-rw-r--r-- 1 root root 1288 Sep 1 2003 README
-rw-r--r-- 1 root root 2284 Jun 1 10:41 Version.php
-rw-r--r-- 1 root root 5046 Mar 22 09:17 add_comment.php
-rw-r--r-- 1 root root 4003 Apr 17 19:49 add_photos.php
-rw-r--r-- 1 root root 1757 Mar 3 18:49 add_photos_frame.php
-rw-r--r-- 1 root root 253 Jan 29 19:53 add_photos_refresh.php
-rw-r--r-- 1 root root 12695 Mar 3 18:49 adv_search.php
-rw-r--r-- 1 root root 10750 Mar 3 18:49 album_permissions.php
....

What am I missing?