"Hostile" Gaza Angers UN, Palestinians

"Hamas is indeed a hostile entity. It is a hostile entity to the US as well," Rice said.

"Following extensive legal consultations, Israel has decided to declare Gaza as a hostile entity, with all the international implications," a senior Israeli official told Agence France-Presse (AFP).

An official statement said the decision would affect supplies of electricity and fuel to the coastal territory, home to 1.5 million Palestinians.

"Restrictions will also be placed on the movement of people to and from the Gaza Strip," the statement said.

Prime Minister Ehud Olmert's office said that there would be "limitations on imports to the Gaza Strip and a reduction in the supply of fuel and electricity".

Israel is already closing the Strip's main border crossings, prompting the suspension of up to 90 percent of the coastal territory's industrial operations.

Gaza uses approximately 200 megawatts of electricity, out of which 120 are provided directly from Israeli power lines.

The impoverished territory and its power station are also dependent on Israeli fuel supplies, partially funded by the European Union.

Asked about the Israeli move, visiting US Secretary of State Condoleezza Rice blasted Hamas.

"Hamas is indeed a hostile entity. It is a hostile entity to the US as well," she told a press conference with Israeli counterpart Tzipi Livni.

"We will not abandon the innocent Palestinians in Gaza and indeed will make every effort to deal with their humanitarian needs."

Gaza has been under a crippling economic boycott, spearheaded by Washington, since Hamas was voted to power in 2006.

Collective Punishment

The Palestinians and the UN were united in condemning the far-reaching Israeli decision.

"This arbitrary decision will contribute to reinforcing the asphyxiating blockade that's hitting 1.5 million Palestinians in the Gaza Strip and aggravate their suffering," a spokesman for President Mahmoud Abbas said in a statement.

"The decision of the Israeli government comes back to make the Palestinian people pay for acts they have nothing to do with and for which they do not carry any responsibility."

The West Bank-based government of Salam Fayyad also criticized Israel.

"We are going to ask the Americans to pressure Israel to refrain from taking such action," said Information Minister Riyad al-Malki.

Hamas, which has been in full control of the Strip since June, lashed out at the Israeli decision.

"We completely reject this collective punishment," spokesman Taher al-Nunu told AFP.

"They aim to starve our people and force them to bow and accept humiliating formulas that could emerge from the so-called November peace conference," added another spokesman, Fawzi Barhoum.

A UN official and independent aid workers slammed Israel's decision as "illegal" and a collective punishment.

"The UN condemns the indiscriminate launching of missiles against Israel but you just can't do this. This is illegal under international law," an official told AFP on condition of anonymity.

"This is only going to make the situation worse…A move like this is only going to hurt the populations," the official warned.

"Israel is still deemed the occupying power of Gaza because it completely controls the air, land and sea crossings and therefore has a responsibility toward the population and has to continue supplying basic utilities."

Aid group Oxfam International slammed the decision as "immoral" collective punishment and in violation of the Geneva Conventions.

"No matter what crimes are being committed, and indiscriminate rocket attacks are a crime under humanitarian law, collective punishment cannot be allowed. It is immoral and contrary to the Geneva Conventions."