The UN's top official in Gaza will tell British ministers today that Israel's cuts in fuel and power to the Palestinians violate international law, while the isolation of Hamas has strengthened extremism and started to drive non-affiliated moderates who can leave Gaza to do so.

"We keep saying people in Gaza are at rock bottom but they keep digging into the rock," Karen Koning- Abu Zayd, head of the UN refugee agency UNRWA, said of Israel's decision to start power cuts and reduce fuel supplies to Gaza in response to continued Qassam rocket attacks. Israel began cutting supplies on Sunday. The Supreme Court has given the state five days to answer a petition by human rights groups against the move, which follows the cabinet's declaration of Gaza as a "hostile entity" last month. An Israeli soldier and two Palestinian militants were killed yesterday in Gaza as the Israeli military continued operations designed to curb the Qassam attacks.

The UNRWA chief, who will meet Douglas Alexander, Secretary of State for International Development and other ministers in London today, said: "I can understand why from the Israeli point of view people may think we need a stronger reaction to the Qassams [and] nothing has worked so far. But I don't see how you can want to punish people, all of them in Gaza, which means most of them who are not behind these activities, in the way you are doing now." In an interview, Ms Koning-Abu Zayd said: "Most people, even in some of the refugee camps, live in high-rise apartments in Gaza and if you don't have electricity, you don't have water, you probably don't have food and if you're older or sick in any way you probably can't climb up and down all those stairs." A cut in fuel would have a "very serious" effect on civilian movement.

Ms Koning-Abu Zayd cast doubt on the idea that the Israeli squeeze on Gaza, including phased cuts in power – starting with 15 minutes per hour in towns such as Beit Hanoun, from which rockets have been frequently launched – would trigger an effective revolt against militants.

"I don't think it's working myself," she said, adding she did not think surveys showing a fall in support for Hamas were "very significant". She said: "The ones that do support them support them even more strongly and because things are getting worse the ones that were talking about compromise and moderation and working together are discredited so you know many people become more extreme."

The Israeli cabinet minister Benjamin Ben Eliezer suggested yesterday that the cuts were the only alternative to moving "four divisions" into Gaza. But Ms Koning-Abu Zayd said: "When we first heard these things I kept saying they won't do this because it's against international law."

Ms Koning-Abu Zayd, the longest serving UN official in Gaza, also made some of the strongest criticisms yet by a UN official of the Israeli and international community's boycott of Hamas since March 2006, which she said had strengthened hardline extremists in the faction.

She hoped that the planned Annapolis conference would renew a peace process and said UNRWA had a "very simple message" that refugees should be on the agenda. But it was a "big negative" that Hamas would not be taking part, and that "at some moment" they would have to be brought into the process.

Since Hamas won the elections two months earlier, "We were saying ... you had to deal with whoever is elected democratically, fairly, justly and that if you didn't, and history seemed to us to prove this, you drive people into becoming more extreme."