Israel Tuesday reopened the terminal that handles all fuel supplies to Gaza to allow delivery of diesel to the Palestinian territory's sole power plant one day after it shuddered to a halt. A UN agency, meanwhile, warned it would have to suspend food distribution on which a majority of Gaza's 1.5 million population depends unless Israel also allows in vital foodstuffs.

The Nahal Oz terminal used for oil deliveries "opened at 8:30 a.m. for the transfer of diesel for the power station," said Israeli Army spokesman Peter Lerner.

An official of the Palestinian energy authority in Gaza confirmed that Israel had resumed the fuel shipments and said the power plant would restart later in the day.

The plant had ground to a halt Monday evening after Israel stopped the flow of fuel to the Gaza Strip in response to rocket fire, which caused no damage, by Palestinian militants in the besieged enclave.

The Gaza fighters launched the attack after Israel violated a truce, in effect since June, invading the territory and killing seven Palestinians.

On Monday evening, Israeli Defense Minister Ehud Barak announced "minimal quantities" of fuel would be sent to the Gaza Strip, at the request of former British Prime Minister Tony Blair, who now acts as envoy for the so-called Middle East diplomatic Quartet made up of the European Union, Russia, the United Nations and US.

"We will be reassessing the situation during the day, and of course if rockets continue to be fired during the day we will take the necessary steps for tomorrow," Lerner said.

Other border crossings with Gaza remained closed.

Israel imposed a blockade of the coastal enclave after the Islamist Hamas movement won legislative polls in 2006 and tightened it after the group seized power in 2007. The move decried by various rights groups as collective punishment of a civilian population.

A cease-fire in and around the territory went into effect on June 19 which virtually halted the rocket attacks from the territory until last week's invasion by Israel.

Chris Gunness, a spokesman for the United Nations Relief and Works Agency (UNWRA), warned that food distribution in the territory would have to be suspended after Thursday unless the closures were eased.

"Food distribution to 750,000 people will be suspended at close of business on Thursday unless we can, on an urgent basis, get into the Gaza Strip wheat, powdered milk, luncheon meat and oil," he said.

The UNWRA spokesman said that the prevention of vital supplies from entering the Gaza Strip was "a further illustration of the barbarity of this inhuman blockade."

"This is not just the physical punishment of a whole community, it is also a mental punishment to have people who need to feed their families living on a hand-to-mouth basis," he said.

Meanwhile, a boat carrying European politicians and pro-Palestinian activists returned to Cyprus from Gaza on Tuesday, the third such voyage in as many months to defy the Israeli blockade that extends to the territory's maritime borders.

"People with the utmost dignity are coping with mounting deprivation from all sides," British MP Clare Short, a former cabinet minister for international development, told AFP upon returning from the three-day Gaza trip.

"It's cruelty, collective punishment, illegal, thoroughly undemocratic and a failure of the EU," said Short, one of the 22 passengers aboard the Dignity.

Also on Tuesday, outgoing Israeli Prime Minister Ehud Olmert warned Tuesday of a looming confrontation with Hamas.

"I have no doubt that the situation between us and Hamas is an unavoidable pre-confrontation situation," Olmert said while touring the military headquarters responsible for the Gaza region.

"It's only a question of time and not a question of if," his office quoted him as saying during the tour.

"We are not eager for it but we are not afraid either and if there is a need to fight Hamas we will do so. In any event we should be alert and prepared.