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Israel cuts back fuel supplies to Gaza

(Adds Palestinian comment, paragraph 2)

JERUSALEM, June 17 (Reuters) - Israel said on Sunday it cut fuel supplies to the Hamas-controlled Gaza Strip, increasing pressure on the Islamist group after it seized control of the impoverished territory.

A representative of Palestinian petrol companies said the territory could run out of fuel for cars and cooking within two days.

Dor Alon, a private Israeli fuel company that supplies Gaza, will provide fuel only to Gaza's power stations, Israel's infrastructure ministry said.

"Fuel is only being allowed in to power stations in order to provide normal electricity," the ministry said in a statement.

Fuel will no longer be supplied to smaller gas stations, a Dor Alon spokeswoman said.

Electricity and water supplies were not affected, Israeli officials said. Israeli energy companies provide about half of Gaza's electricity needs at peak hours.

Israel hopes to isolate Gaza after Hamas seized control of the territory in less than a week of fierce factional fighting with President Mahmoud Abbas's secular Fatah faction.

The Western-backed Abbas swore in an emergency cabinet on Sunday after sacking a three-month-old unity government he formed with Hamas, which won parliamentary elections in January 2006.

COMPLETE ISOLATION

Israeli Infrastructure Minister Binyamin Ben-Eliezer, whose office controls fuel supplies, called for a complete separation between the Gaza Strip and the occupied West Bank, where Fatah remains dominant.

"We should simply increase the isolation of Gaza," Ben-Eliezer told Israel's Army Radio. "I want to stop everything until we understand what is going on there."

Palestinian officials asked Dor Alon not to cut off any more fuel until further notice, the infrastructure ministry said.

Israel's deputy defence minister, Efraim Sneh, said Gaza will not be cut off completely.

"There will be a crisis in Gaza because it's being controlled by gangs who show no responsibility to the public. Israel is not (Hamas leader) Ismail Haniyeh's welfare office," Sneh said on Israel Radio.

Senior Abbas aide Saeb Erekat said he had asked Israel to allow fuel and raw materials to continue reaching the 1.5 million Palestinians living in Gaza, many of them aid-dependent refugees.

"I have spoken to the Israelis about President Abbas's request to maintain the flow of food, medical supplies, fuel, electricity and water to Gaza," Erekat told Reuters. (Additional reporting by Nidal al-Mughrabi in Gaza and Wafa Amr in Ramallah)

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