Gaza sole power plant ground to a halt on Tuesday after it ran out of diesel, an energy authority official said, calling on Egypt to intervene to resolve the crisis.
The power plant, which supplies around a third of Gaza's electricity, suffers frequent outages, leading to daily blackouts across the Hamas-run territory.
"The Gaza power plant has completely stopped working because of the shortage of fuel entering the Gaza Strip, and the depletion of diesel it needs to work," said Ahmad Abu al-Amrin, an official from Gaza's energy authority.
He called on Egypt "to assume its historical responsibility in supporting the resistance of the Palestinian people by ensuring they had all the necessary fuel to operate the plant."
According to the UN agency for humanitarian affairs, OCHA, the amount of fuel being transported through the tunnels from Egypt to Gaza has dropped by half over the last fortnight, reportedly due to increased restrictions on the movement of fuel by the Egyptian police.
"Only half of the amount of fuel that entered in the previous weeks has been coming into Gaza for the past two weeks," OCHA said in its weekly report.
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"Unconfirmed reports indicate that the reason for this sharp decline is an increase in fuel prices triggered by movement restrictions imposed by the Egyptian police on fuel cargos travelling to Rafah."
Gaza's Hamas prime minister Ismail Haniya also urged Egypt to help, issuing a statement calling on Cairo to "immediately intervene and meet all the electricity needs of Gaza in a permanent way," warning that the territory was facing a "real humanitarian crisis."
Health ministry spokesman Ashraf al-Qader told AFP the powercuts were endangering the lives of hospital patients.
"Most of those who are sick in Gaza are facing a real and permanent danger due to power cuts," he told AFP, pointing to dialysis patients, those needing cardiac support or those in intensive care.
Israel imposed a blockade on the Gaza Strip in 2006 following the capture of one of its soldiers in June of that year.
The blockade was tightened a year later following Hamas's forcible takeover of the territory, and Israel began restricting the amounts of fuel allowed through the crossings.
"To cope with the situation, Palestinians gradually developed tunnel infrastructure allowing the transfer of large quantities of fuel into Gaza, at a cheaper price, which resulted in an almost complete halt in the purchase from Israel," OCHA said.
Gaza's main power plant has closed down on several occasions in the past because of fuel shortages.