Movement of goods from Gaza to Israel had been stopped earlier because of fear of Palestinian attacks, but shipments from Israel into Gaza were renewed last Thursday on what Israel said were humanitarian grounds.
The latest shutdown on Tuesday brings all activity to a halt.
Israeli security officials, speaking on condition of anonymity because they were unauthorised to make an official statement, said the latest shutdown would continue until further notice, subject to daily re-evaluation.
Karni is critical for the Palestinian economy because it is the only conduit for Palestinian exports and the main gateway for goods entering Gaza.
Its repeated closure has caused hardships for ordinary Palestinians, who reported food shortages, as well as for farmers and merchants.