Gaza's sole power plant shuddered to a halt on Monday evening after Israel refused to allow fuel into the besieged territory, a Palestinian official said.

"The power station has stopped functioning completely due to a lack of fuel," said Qanaan Obeid, deputy director of Gaza's official energy office.

"The power station provides 40 percent of the Gaza Strip's electricity, the remainder comes from Israel," he added.

The Islamist movement Hamas, which controls the Gaza Strip, instituted power cuts in certain districts of Gaza due to the shortages, the official said.

The defence ministry said it had stopped the flow of fuel to the Gaza Strip due to militants firing rockets from the territory into Israel.

"After consultations with security officials and in view of the continued rocket fire, Defence Minister Ehud Barak has decided to maintain the closure of the border crossings and not to authorise the delivery of fuel," a ministry statement said.

"The issue of the reopening of the border crossings and the delivery of fuel supplies will be the subject of further consultations by the defence minister in the evening," the statement added.

Later in the evening, the ministry said in a new statement that Barak had decided to allow a "limited resumption" of supplies to the Gaza Strip from Tuesday at the request of Tony Blair, envoy of the Middle East Quartet -- comprising the European Union, Russia, the United Nations and the United States.

"The fuel supply will be resumed completely when rocket fire from the Gaza Strip has ceased," Barak said.

Two rockets fired from the Gaza Strip hit southern Israel on Monday without causing any casualties or damage, army spokeswomen said.

Palestinian officials in Gaza said on Sunday that power supplies had been reduced by one third in the absence of fuel and that electricity would be completely cut off in the coastal territory by Monday evening.

But Israel insisted that Gaza was still getting enough electricity from the Israeli and Egyptian grids to provide 75 percent of its needs and accused Hamas of exploiting the situation for political ends.

"The cynical Hamas exploitation of the civilian population in Gaza is contemptible," a foreign ministry statement said.

"There is sufficient electricity in the Gaza Strip to operate hospitals and other essential facilities. Hamas, as usual, is orchestrating a media show."

The European Commission, which funds the fuel deliveries to Gaza's sole power plant, said it had been informed by Israel that they might resume on Tuesday.

"The Israel liaison office with the Palestinian territories told us that the deliveries to the power station could resume tomorrow," a spokeswoman said.

Barak ordered the sealing of the crossings after Palestinian militants again fired a rocket against southern Israel on Sunday, causing no casualties but threatening a shaky ceasefire.

Under the Egyptian-brokered truce, Israel agreed to open the vital crossings with Gaza, through which badly needed food and fuel are transported and the Islamists vowed to halt rocket attacks.

Last week, Gaza militants fired a barrage of rockets in retaliation for the killing of seven fighters by Israeli troops, in the worst incidents since the Egyptian-mediated truce went into effect on June 19.

Israel imposed a punishing blockade on the impoverished territory after the Islamists seized power and ousted forces loyal to moderate president Mahmud Abbas.

rawstory.com/news/afp/Gaza_s_power_plant_halted_as_Israel_11102008.html