Rafiq Maliha, the director of the electricity company, said: "We are forced to stop three out of the station's four generators."
Gaza has a single 140-megawatt power plant that provides about three-quarters of the territory's needs. All of the fuel for the plant comes from Israel.
The rest of Gaza's electricity needs is supplied by Israel, Egypt and private electricity generators.
Several districts in Gaza City and in the north of the strip lost their power after 6pm, but witnesses said the current continued to flow in the south.
"We have not received fuel since Thursday morning," Maliha said. "We didn't receive any today and tomorrow is Shabat [Saturday] for the Israelis, so there won't be any. The situation is difficult."
He warned that if fuel was not delivered to the impoverished territory before Sunday morning, "electricity production will stop entirely".
Security conditions
Maliha said Israel had stopped fuel deliveries because of security conditions at the Nahal Oz crossing between the coastal strip and the Jewish state.
An Israeli army spokesman confirmed to AFP that deliveries of fuel had been stopped "for security reasons".
"More than 1.4 million litres of fuel crossed from Israel into the Gaza Strip through Nahal Oz" between Sunday and Wednesday, the spokesman said.
Maliha urged "the European Union and the Palestinian Authority to intervene quickly as this will have negative consequences for Gaza, especially for hospitals".
Home to about 1.5 million people, Gaza is one of the world's most densely populated cities.
Israeli raids
Israeli troops killed two Palestinians and wounded six others during a raid near the West Bank city of Jenin on Friday, Palestinian sources said.
Palestinian security officials said that a gun battle broke out between Israeli troops and local fighters in the village of Kafr Dan. Nour Marey, a 16-year-old boy and one gunman were killed in the attack.
An Israeli army spokesman said that "several gunmen were identified during an activity against terror infrastructure. The troops fired at them and identified hitting them."
The Abu Amar Brigades, an armed group linked to Mahmoud Abbas, the Palestinian president's Fatah faction, said that the man killed was one of its leaders.
In a separate raid, Israeli aircraft fired two missiles at Palestinian rocket launchers in the northern Gaza Strip, Hamas forces said on Friday.
The missiles missed the launching squad that was on its way back from firing rockets towards Israel and caused no injuries, the forces said.
The army confirmed that aircraft had fired at Palestinian fighters who launched rockets.
More than 15 rockets and mortar shells were fired from the Gaza Strip towards Israel on Friday, some from the area of the air strike, the army said.