Israel will reduce electricity supplies to the Gaza Strip after the Palestinian Authority limited how much it pays for power to the enclave run by Hamas, Israeli officials said on Monday.

The decision by Israel's security cabinet is expected to shorten by 45 minutes the daily average of four hours of power that Gaza's two million people receive from an electricity grid dependent on Israeli supplies, the officials said.

The West Bank-based Palestinian Authority (PA) blamed Hamas's failure to reimburse it for electricity for the reduction in power supplies.

But PA spokesman Tareq Rashmawi coupled that explanation with a demand that Hamas agree to Palestinian President Mahmoud Abbas's unity initiatives, which include holding the first parliamentary and presidential elections in more than a decade.

"We renew the call to the Hamas movement and the de facto government there to hand over to us all responsibilities of government institutions in Gaza so that the government can provide its best services to our people in Gaza," he said.

Hamas spokesman Fawzi Barhoum said Israel and the Palestinian Authority "will bear responsibility for the grave deterioration" in Gaza's health and environmental situation.

Any worsening to Gaza's power crisis - its main electrical plant is off-line in a Hamas-PA dispute over taxation - could cause the collapse of health services already reliant on stand-alone generators, many of them in a poor state of repair, Ashraf al-Qidra, spokesman for the Health Ministry in Gaza, said.

Israel charges the about $11m a month for electricity, deducting that from the transfers of Palestinian tax revenues it collects on behalf of the Authority. Israel does not engage with Hamas, which it considers a terrorist group.

Last month, the Palestinian Authority informed Israel that it would cover only 70 percent of the monthly cost of electricity that the Israel Electric Corporation supplies to the Gaza Strip.

At the security cabinet session late on Sunday, ministers decided that Israel would not make up the shortfall, the officials said.

"This is a decision by (Abbas) ... Israelis paying Gaza's electricity bill is an impossible situation," Israel's public security minister, Gilad Erdan, told Army Radio.

Israeli military and security chiefs backed the move, despite concern Hamas could respond by increasing hostilities with Israel.

Hamas seized control of the Gaza Strip from Abbas's Fatah movement in 2007, and several attempts at reconciliation, most recently in 2014, have failed.

Hamas has accused Abbas of trying to turn the screw on them to make political concessions.