Lack of fuel from Israel brought Gaza's lone power plant to a halt on Friday, days after it was fired back to life following a seven-week shutdown, the electricity company said.
"The plant stopped working on Friday morning due to a lack of fuel caused by Israel's closure of the Kerem Shalom crossing," said a company official.
Israel closed the crossing to the besieged Palestinian territory on Tuesday following a series of violent cross-border incidents earlier in the week.
According to the official, the closure of the power station means that electricity supplies to Gaza would be limited to six hours a day as opposed to the usual 12 hours a day.
The plant, which supplies some 30 percent of Gaza's electricity needs, had previously fallen silent on November 1 as stocks of diesel ran out.
The power station returned to life on December 15 after receiving a delivery of fuel purchased from Israel by the West Bank-based Palestinian Authority using funds donated by Qatar.
The PA helped facilitate the delivery via Israel, which the militant Hamas rulers of Gaza do not recognise.
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An Israeli security official, speaking to AFP on condition of anonymity, flatly denied that the closure of the Kerem Shalom crossing was responsible for the lack of fuel for the power plant.
According to him, the situation had arisen due to "an internal conflict between the Palestinian Authority and Hamas".
"The Palestinian Authority is refusing to supply fuel because Hamas has not paid for it," the official said, adding that the funds donated by Qatar had run out.
Israeli NGO Gisha, which lobbies for freedom of movement for Palestinians, accused Israel of carrying out mass punishment of civilians in Gaza by closing the Kerem Shalom crossing.
"Israel can and must protect its citizens, but the timing of the closure and the statements accompanying it suggest that it is a punitive measure, primarily harming civilians and civilian infrastructure," said Gisha director Sari Bashi.
"Just as international law forbids targeting civilians, so it forbids punishing them for acts they did not commit."
The Kerem Shalom crossing was closed on Tuesday following a series of cross-border exchanges between Israel and Gaza militants after the fatal shooting of an Israeli man engaged in maintenance work on the northern Israel-Gaza border fence by a Palestinian sniper.