GAZA (Reuters) - A U.N. agency suspended its aid operations in the Gaza Strip on Thursday after an emergency shipment of fuel designated for its use was blocked by petrol-hungry Palestinian farmers.

Mahmoud al-Khuzundar of the Association for Petrol Station Owners in the Gaza Strip said 50,000 liters (13,209 gallons) of diesel was meant to be delivered to the United Nations Relief and Works Agency (UNRWA) to help aid distribution.

But a group of Gaza farmers who wanted fuel to be distributed openly beyond UNRWA blocked the tanker from reaching the terminal where fuel is pumped into the Gaza Strip, forcing the aid agency to suspend operations.

“We did not receive any fuel today and therefore the distribution of food supplies has been suspended,” said Adnan Abu Hasna, UNRWA’s media advisor in Gaza.

Israel stepped up its blockade of Gaza in June after Hamas seized the territory, home to 1.5 million Palestinians, from its Fatah rivals. Israel says it has limited fuel and other deliveries in response to cross-border rocket attacks by militants in Gaza.

Abu Hasna said the food suspension will affect at least 700,000 refugees in the Hamas-controlled territory. UNRWA said 50,000 liters of fuel should be enough to last about a week.

The petrol station owners’ association has been on strike, refusing to collect the fuel near Nahal Oz crossing -- the only border terminal used to pump fuel to the Gaza Strip -- in protest at Israel’s cutbacks in supplies to the territory.

UNRWA warned on Wednesday it would be forced to suspend food distribution to Palestinians on Thursday unless it received fuel supplies. The European Union called on Israel to ensure fuel deliveries to Gaza.

“It is unacceptable that the U.N. should find itself having to consider suspending its humanitarian operations simply for a lack of fuel for its vehicles,” EU aid commissioner Louis Michel said in a statement.

“It is also unacceptable that public services, such as garbage collection, sewage treatment, or hospitals are on the brink of collapse for the same reason,” he said.

“It’s essential that the fuel supply to Gaza is resumed, and in particular that fuel provision for the United Nations agencies, as well as basic services be guaranteed immediately.”

Colonel Nir Press, head of Israel’s Coordination and Liaison Administration for Gaza, said Israel had coordinated with UNRWA Thursday’s disrupted delivery and that he hoped it would be renewed on Friday.

“There is about a million liters (264,170 gallons) of diesel and petrol in storage tanks on the Palestinian side of Nahal Oz. For a month now, the Palestinians have not been taking the diesel and petrol,” Press said.

Press accused the Islamist Hamas group of preventing its distribution and creating the fuel shortage.

Palestinian militants attacked the Nahal Oz fuel terminal two weeks ago, killing two Israeli civilians.

DRAMATIC SITUATION

The French medical aid group Medecins Sans Frontieres (MSF) said its operations, which have already been hampered by the shortages, will also end unless it receives new deliveries.

“Currently MSF is functioning on its emergency stock and only has 10 days of fuel left. If supplies are not restored, the situation could become dramatic very quickly,” said mission chief Duncan Mclean.

Israel allowed one million liters of EU-funded diesel fuel to be pumped to Gaza’s only power station on Wednesday after Kanan Abaid, deputy chairman of the Palestinian Energy Authority in the Gaza Strip, warned the plant would have to shut down unless supplies resumed.

A European Commission official said there was enough fuel at the plant for about three days, but that it would have to shut down on Sunday if no new deliveries were allowed through.

(Additional reporting by David Brunnstrom in Brussels and Francois Murphy in Paris)