Israeli officials have confirmed that they have started cutting fuel supplies to the Gaza Strip.
The cut in fuel supplies form Israel are yet to bite in Gaza
The cuts came into effect on Sunday and will see a reduction in fuel supplies to Gaza by as much as 15 % by the end of this week.
Israel says the decision was taken to pressure ordinary Gazans into stopping rocket fire by Palestinian militant groups into Israel.
But a Hamas spokesman in Gaza said that the move was "collective punishment."
Petrol supplies will be cut by 15% this week, from 350,000 to 300,000 litres, Shlomo Dror, the spokesman for the Israeli administration in the occupied territories, told the BBC.
Diesel supplies will be reduced by 10%, from 1.4m to 1.25m litres a week. An EU official confirmed to the BBC that fuel supplies to Gaza's power station had been reduced.
BBC producer Rushdi Abu Alouf in Gaza says that the cut in supply is not being felt by Gazans yet.
The move has been condemned by Hamas, which governs the territory, and a number of international organisations.
"The Israeli decision is a real crime against 1.5 million Palestinian in Gaza," said Hamas spokesman, Taher Nouno.
"We in the Hamas government consider the decision as a collective punishment."
The fuel cuts were also condemned by the EU.
"We understand the distress that is caused in Israel by the continuing rocket attacks from Gaza," said Benita Ferrero-Waldner, the EU's commissioner for external relations, according to the Reuters news agency.
But she added that the Israeli measures "will have very grave consequences for the life of the local population" and serve to bolster Hamas and other militant groups.
"There should not be collective punishment," she added.
But Israeli officials insist that the measures would not cause undue hardship.
"These measures will not cause a humanitarian crisis," Mr Dror said.
"The ambulances will still run and the hospitals will still work."
The Israeli official also said that Israel would reduce electrical supplies to Gaza in the coming week.
Rockets are fired by Palestinian militants from Gaza into Israel on an almost daily basis. Israel withdrew all its settlements from Gaza in 2005.
But the Palestinian militants say that they are responding to continued Israeli aggression in Gaza and the West Bank.