(CNN) The United Nations has issued an urgent appeal for Israel and Gaza "to step back from the brink" of war and revive the reconciliation process, calling for Palestinians to keep protests peaceful and for Israel to show restraint in its response.

Nickolay Mladenov, UN special coordinator for the Middle East, was speaking just hours after an escalation in violence that saw 200 projectiles fired towards Israel from Gaza and dozens of airstrikes launched in response, according to Israel Defense Forces.

"Yesterday we were on the brink of war," Mladenov told a press conference in Gaza on Sunday. "And it has taken the concerted efforts of everyone to make sure that we step back from confrontation. A confrontation that nobody wants, nobody needs, and a confrontation from which everybody will lose."

Mladenov highlighted the worsening humanitarian situation in Gaza and the deteriorating political and security situation in the region.

"People's life (in Gaza) has become more difficult as people have limited money, the economy has collapsed, electricity and water are scarce," he said. "We cannot stand idle when we see two million Palestinians in Gaza living in such terrible conditions as they do now."