John Dugard, special UN rapporteur on human rights in the occupied Palestinian territory, said on Tuesday that the US, Europe and Canada had failed the Palestinian people by withdrawing funds since Hamas's refusal to accept Israel's right to exist.
He also described the Palestinians' lives as appalling and tragic.
He said: "In other countries this process might be described as ethnic cleansing but political correctness forbids such language where Israel is concerned.
"If the international community cannot take some action, [it] must not be surprised if the people of the planet disbelieve that they are seriously committed to the promotion of human rights."
Israel hit back saying there was an "alarming disconnect" between the rapporteur's report to the UN's human rights watchdog and the experience of Israelis who continued to face the "daily threat of Palestinian terrorism".
But Dugard, who has been a special UN investigator since 2001, said: "Israel violates international law as expounded by the Security Council and the International Court of Justice and goes unpunished.
"But the Palestinian people are punished for having democratically elected a regime [Hamas] unacceptable to Israel, the US and the EU."
No comment
In the past, similar criticism has been rejected by Israel and the US, who say that the current crisis has been provoked by attacks by Palestinian.
Israel says its security restrictions are designed to stop bombers entering Israel.
It also maintains tight restrictions on the movement of goods and people in and out of Gaza, a coastal strip that it pulled out of last year after 38 years of occupation.
Dugard said that three-quarters of Gaza's 1.4 million people were dependent on food aid.
Bombing raids by Israel since the June 25 capture of an army corporal by Palestinian militants had destroyed many houses and the territory's only power plant.
The West Bank also faced a humanitarian crisis, due to the barrier, which Dugard said was a move by Israel to annex more land.
'War crime'
An Israeli human rights group has condemned Israel's bombing of a Gaza power plant as a war crime.
B'Tselem, an independent group that monitors Israel's occupation of the West Bank and its policies in Gaza, said Israel could have used "less harmful alternatives".
Israeli war planes largely destroyed the power plant outside Gaza City on June 28.
Israel said at the time that it bombed the plant to cut power supplies and therefore make it more difficult for Palestinian fighters to operate following their kidnap of an Israeli soldier on June 25.
The bombing cut off electricity to many of Gaza's 1.4 million residents, affecting hospitals and food supplies, and had a knock-on impact on water and sewage systems.
"The bombing of the power plant was illegal and defined as a war crime in international humanitarian law as the attack was aimed at a purely civilian object," the rights group said in a report entitled "Act of Vengeance".
"Even if one adopts the doubtful claim that the attack provided some definite military advantage, it was disproportionate and Israel had other, less harmful alternatives."