Food deliveries to the Gaza Strip have been halted because of Israeli restrictions, the United Nations says.
Two out of three families in Gaza live below the poverty line
The UN Relief and Works Agency (Unrwa) said an Israeli ban on moving empty containers out of Gaza had forced it to suspend delivering 11,000 tons of food.
Peter Hansen, UN chief responsible for Palestinian refugees, said the 600,000 people in Gaza could face real hunger.
An Israeli spokesman told BBC News Online suicide bombers had used containers for hiding in.
He said the perpetrators of a double suicide attack on 14 March, which killed 10 people in the Israeli port area of Ashdod, hid in containers to slip out of the Gaza Strip.
"At the moment we cannot trust anything, especially since the death of Hamas leader Sheikh Ahmed Yassin," the spokesperson said.
"We are exercising extreme caution."
An Unrwa statement said Israel's refusal to allow empty freight containers out of Gaza meant it had to pay prohibitive rental payments to shipping companies that own them.
"We rent those containers from the shipping line," Unrwa official Christer Nordahl told the Associated Press.
"Not being able to return them means we have so far run up a bill of $500,000 and it's increasing every day."
Unrwa has stopped distributing rice, flour, cooking oil and other essential foods in Gaza, where nearly two out of three families live below the poverty line and more than half the workforce are unemployed.
The agency has already had to cut emergency rations in the occupied territories from 60% to 40% of daily requirements because of underfunding.
"If the new restrictions in Gaza continue, I fear we could see real hunger emerge for the first time in two generations," said Mr Hansen.
"Israel's legitimate, and serious, security concerns will not be served by hindering the emergency relief work of the United Nations."
UN aid to Gaza has already been cut because of underfunding
The agency says some aid workers are also unable to enter the Gaza Strip anymore, because Israeli restrictions force them to cross the border in exposed areas, "creating unacceptable risk and danger".
Unrwa will hold a conference in Geneva in June to discuss humanitarian assistance to Palestinian refugees.
Up to 70 countries and aid organisations are expected to attend - the first time in the agency's 54-year history that such a meeting has been held.