Gaza's sole power plant shut down on Saturday after running out of fuel, five days after Israel closed its goods crossing with the Palestinian enclave.
"The power plant in Gaza has stopped [working] due to the fuel shortage," said Mohammed Thabet, an electricity company spokesman.
The electricity supply is expected to plummet to only four hours a day, Mr Thabet said.
Diesel for the power plant is usually transported by lorries from Egypt or Israel, which has maintained a blockade of the enclave since the militant group Hamas took control of Gaza in 2007.
The power plant shutdown comes a day after Israel launched extensive strikes on Gaza that it said were targeted at the Islamic Jihad militant group. A commander of the group was among at least 12 people killed in the attacks, which also claimed the lives of civilians.
Gaza's 2.3 million residents experience regular power shortages and last week received an average of only 10 hours of electricity a day, according to data from the UN's humanitarian agency Ocha.
Earlier on Saturday, the electricity company said a shutdown would "affect all public utilities and crucial installations and exacerbate the humanitarian situation".
The company called on "all parties to urgently intervene and allow the entrance of fuel deliveries for the power plant to work."
Gaza's Health Ministry warned that vital services could be suspended within 72 hours because of the power plant shutdown.
Israel's closure of its crossings with Gaza came as the military braced for reprisals following the arrest of two senior Palestinian Islamic Jihad members in the occupied West Bank.
On Friday, Israel launched air strikes against Gaza that killed Islamic Jihad commander Tayseer Al Jabari, prompting the group to launch dozens of rockets towards Israel.
The exchange of fire, which continued on Saturday, has raised fears of another full-blown war between Israel and militants groups in Gaza.
With reporting from agencies.