"The international community must act rapidly to rebuild Gaza," he told reporters at a UN-run school in Gaza City, one of a number of places hosting some 17,000 Gazans who were displaced during the war.
"The inhabitants of Gaza are living through a real tragedy," he said, referring to the 50-day war which left nearly 2,200 Palestinians dead, more than 10,000 wounded and over 120,000 homes damaged or destroyed.
Although the fighting stopped more than four months ago, reconstruction has yet to begin in earnest for a variety of reasons, including delays caused by the conditions of Israel's blockade on the territory.
Standing next to him, Pierre Krahenbuhl, the commissioner general of the UN agency for Palestinian refugees (UNRWA), warned that delaying the reconstruction "would have negative consequences".
Last week, a major winter storm battered the region, leaving three infants dead and thousands of families suffering from the gale force winds, torrential rain and freezing conditions.
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"The winter storms have heightened the vulnerability of a population that is struggling to recover from the 50-day conflict. Reconstruction is slow and discontent is growing as funds and support fail to materialise," an UNRWA statement said.
"To date, some $135 million has been received by UNRWA, leaving a funding gap of $585 million for shelter assistance. UNRWA is warning that unless the current situation changes, funds for cash assistance will run out in February."
So far, UNRWA has provided $70 million in aid to more than 40,000 families for repairing their damaged homes, Krahenbuhl said.
On Monday, Garcia-Margallo met his Palestinian counterpart Riyad al-Malki in the West Bank city of Ramallah, as well as Palestinian prime minister Rami Hamdallah, who heads a national consensus government which was formed in June in the wake of a reconciliation agreement between Hamas and its rivals in Fatah, the party of president Mahmud Abbas.
In mid-November, the Spanish parliament voted in favour of a motion urging Madrid's conservative government to recognise Palestine in coordination with any similar move by the European Union, drawing an angry response from Israel.
On January 1, Spain began a two-year term as a non-permanent member of the UN Security Council where the Palestinians tried and failed to have a resolution passed late last year calling to set an end date for the Israeli occupation.