(Updates death toll)
By Nidal al-Mughrabi
GAZA, Jan 20 (Reuters) - Large parts of the Gaza Strip plunged into darkness on Sunday when its main power plant shut down after Israel blocked fuel supplies and closed the border to the Hamas-run territory.
Israel said the blockade was in response to rocket attacks from Gaza and that "everything would go back to normal" if militants stopped firing missiles, Israeli Foreign Ministry spokesman Arye Mekel said.
Israel has also reduced the flow of petrol used in cars, as well as diesel, but not fuel oil and cooking gas, he said.
Lines formed at bakeries on Sunday as Palestinians stockpiled food and factories and petrol stations were closed after Gaza’s electricity generating station turned off the second of its two turbines.
"At least 800,000 people are now in darkness," said Derar Abu Sissi, general director of the plant. "The catastrophe will affect hospitals, medical clinics, water wells, houses, factories, all aspects of life."
Mekel questioned whether the complete shutdown of the generating plant was necessary, suggesting Hamas Islamists had a political interest in exaggerating the impact of the Israeli measures.
According to Israeli and Palestinian officials, Gazans ordinarily consume 200 megawatts of electricity, of which 65 are produced by the local power plant. The rest comes from Israel, which was continuing supply, and Egypt.
Israel tightened its cordon around Gaza on Friday by shutting all border crossings, cutting fuel supplies and even stopping U.N. humanitarian supplies, except in exceptional circumstances.
Officials of the European Union, which funds fuel for the plant, confirmed Sunday’s shipment was blocked and that reserves had dried up.
The United Nations on Friday condemned the closures and warned Israel against imposing illegal "collective punishment" against Gaza’s 1.5 million residents.
"This is how Israel wants Gaza: a sea of darkness. The civilised world is watching in complete silence," said Gaza store owner Abu Mohammad Osama.
Israeli air strikes killed at least two Palestinian militants on Sunday. The Jewish state has killed dozens of people in the past week in a stepped-up campaign it says targets militants who have attacked border towns with some 230 rockets.
The Palestinians have called Israel’s offensive, which included bombing the Hamas-run Interior Ministry in Gaza, a "slap in the face" to U.S.-backed peace efforts.
"The darkness in Gaza City tonight is a clear evidence ... of just how desperate the situation has become here now," John Ging, head of the United Nations Relief and Works Agency (UNRWA) in Gaza, told a news conference in the enclave.
Hamas, which refuses to renounce violence and recognise Israel, vowed no let up in its fight against the Jewish state. Official Sami Abu Zuhri called on Egypt to reopen its own border with Gaza, which has mostly been closed since the June takeover, and warned of an "explosion" if the closure continued.
Palestinian President Mahmoud Abbas, who is pursuing a U.S.-backed peace deal with Israel, urged the Jewish state to open crossings to Gaza and allow fuel into the territory, but urged Palestinians not to give Israel "the justification it needs to pursue its aggression and siege".
He called on Arab countries and the international community to intervene.
The number of rocket attacks fired from Gaza dropped off sharply on Sunday. Only four rockets and one mortar round were launched at Israel during the day, compared with more than 45 on Friday and Saturday, an Israeli army spokesman said.
In West Bank cities, where Abbas’s Fatah holds sway, protesters carried candles to show solidarity with those in the coastal territory, chanting "God is with you Gaza". (Additional reporting by Adam Entous, Mohammed Assadi and Wafa Amr; Writing by Adam Entous, Jeffrey Heller and Rebecca Harrison; Editing by Matthew Jones)