GAZA - Gaza hospitals will run out of drugs and fuel for generators within a few days unless Israel eases the border blockade it imposed on the Hamas-controlled territory, international organisations said on Monday.

The European Union, which funds fuel for Gaza's now-idle main power plant, said it understood Israel's need to defend itself against cross-border rockets but called the restrictions "collective punishment" and said they should be lifted.

Israeli Prime Minister Ehud Olmert, speaking by telephone with a concerned Egyptian President Hosni Mubarak, assured him that "Israel will not cause a humanitarian crisis", said an Olmert aide.

Gaza's main power plant shut down on Sunday after Israel blocked fuel supplies, plunging much of Gaza City into darkness. While it provides only 30 percent of the territory's electricity, its closure affected a far greater proportion of the population because of the way the power grid system works.

Residents of the impoverished territory awoke to nearly traffic-free streets and shuttered shops, with petrol in short supply since Israel closed Gaza's border crossings on Friday.

Palestinian officials have warned Israel's standoff with Gaza militants, who have vowed to continue the rocket fire, could harm U.S.-spurred peace efforts.

"There is no fuel, meaning there is no work," said Abu Mahmoud, a fisherman. "We have seen bad times before, but never worse than these days."

European Union and United Nations officials said the organisations were pressing Israel to allow in fuel and medicine immediately to the Gaza Strip, where 1.5 million people live.

"We hope and expect nothing less than a positive decision ... We want this to happen today," said Richard Miron, spokesman for U.N. Middle East envoy Robert Serry.

Michele Mercier, a spokeswoman for the International Committee of the Red Cross, said Gaza hospitals "still have stocks, but it won't last for more than two or three days".

"If no more stocks are available, you can imagine what it means for the treatment of wounded and ... everyday medical care would be affected," Mercier said.

RUNNING LOW

EU officials said the hospitals, many now using generators, were running out of fuel to keep the power on. Khaled Radi, spokesman of the Ministry of Health in Gaza, said many of the facilities were performing only emergency surgery.

"I have made clear that I am against this collective punishment of the people of Gaza," EU External Relations Commissioner Benita Ferrero-Waldner said in a statement.

"I urge the Israeli authorities to restart fuel supplies and open the crossings for the passage of humanitarian and commercial supplies."

Olmert, who has vowed to press on with raids in the Gaza Strip to curb rocket fire, told visiting Dutch Foreign Minister Maxime Verhagen that Israel would ensure the "vital needs" of the territory were met, but no "luxuries" would be allowed in.

"It is inconceivable that the terrorist groups disrupt the lives of tens of thousands of Israelis every day while life in Gaza goes on as usual," Olmert said, according to his aide.

Despite its tough public line, Israel has not cut off its direct supply of electricity to the Gaza Strip. Egypt also provides power, to the southern part of the territory.

The Israeli blockade of Gaza has also stopped U.N. aid shipments that include food and other humanitarian supplies.

But UNRWA, which provides food to refugees, estimated it had two months' worth of supplies stored in Gaza.

"There is not a humanitarian crisis. It's not correct. Certainly, Israel will do everything in order to prevent a humanitarian crisis," said Amos Gilad, a senior Israeli Defence Ministry official, accusing Palestinians of waging a propaganda campaign.