"At least 800,000 people are now in darkness," Derar Abu Sissi, general director of the plant, said.
"The catastrophe will affect hospitals, medical clinics, water wells, houses, factories - all aspects of life."
Following the blackout, Khaled Mashaal, Hamas's political chief, called on Arab leaders and rival Mahmoud Abbas, the Palestinian president, for help to restore power in Gaza City.
"All Arab leaders, exercise real pressure to stop this Zionist crime ... take up your role and responsibility," he said in an interview with Al Jazeera.
"We are not asking you to wage a military war against Israel ... but just stand with us in pride and honour," he said from Syria where he lives in exile.
Abbas urged Israel to immediately lift the Gaza blockade and resume delivery of fuel supplies.
Nabil Abu Rudeina, his spokesman, said Abbas also called for a "special meeting" of foreign ministers of the Arab League to discuss the crisis.
This was in addition to a meeting of ambassadors scheduled for Monday in Cairo.
"If Israel does not lift the blockade in the next few hours, we are going to raise the issue with the UN Security Council," Abu Rudeina added.
The Israeli foreign ministry said the diversion of fuel from domestic power generators to other uses was "wholly a Hamas decision".
"Noteworthy is the fact that while the Gaza population remains in the dark, the fuel generating power to the Hamas rocket manufacturing industry continues to flow unabated," it said in a statement to Al Jazeera.
"The Hamas claim of humanitarian crisis in Gaza is also greatly exaggerated."
Arye Mekel, an Israeli foreign ministry spokesman, said that the power plant shutdown was unnecessary. "They have an interest in exaggerating," he said.
Israel says the blockade imposed on Gaza is in response to rockets being fired from the territory.
Mekel said that supplies of petrol used in cars, as well as diesel, had been halted but not fuel oil and cooking gas.
Referring to Hamas, he said: "The ball is in their court. If they stop the rockets today, everything would go back to normal."
Power outages have become commonplace in the Gaza Strip in recent months after Israel declared the area a "hostile entity" and began restricting fuel supplies.
Ahead of the shutdown, residents bought up batteries and candles, as well as basic foods like rice, flour and cooking oil. Bakeries stopped operating because they did not have power or flour.
UNRWA, the UN organisation supporting Palestinian refugees, warned the shortages would drastically affect hospitals, sewage treatment plants and water facilities.
"The logic of this defies basic humanitarian standards," Christopher Gunness, UNRWA spokesman, said.Patients at risk
|Palestinians fear the power cut could be |
disastrous for the health sector [AFP]
Dr Medhat Abbas, head of the crisis management unit at the health ministry in Gaza, said that electricity from generators would only be available for a few more hours at the Al-Nasser children's hospital.
"These patients and these children are facing their destiny and they will die soon," he told Al Jazeera.
"They escaped from their poor houses were they have very cold weather ... The families brought them here to be saved in the incubator. Now the incubator and the nursery will be out of electricity.
"What sort of humanitarian law is this?"
He said the blackout would also deprive cancer and intensive care patients of their treatment as well as spoiling blood and vaccines that were being stored.
Al Jazeera's Jacky Rowland in Gaza said that it was not only power generation that would be affected.
"It also means no fuel for the generators that fuel the water pumps - a lot of the water in Gaza is deep beneath the surface, and it has to be pumped to the surface - so no fuel can also mean no water."
The UN has said Israel should not collectively punish Gaza's population while responding to security threats.
The organisation has criticised Israel's decision to close border crossings into Gaza, preventing aid deliveries to the 1.5 million people living in the territory, saying on Saturday that the move could provoke a humanitarian crisis.
Ban Ki-moon, the UN secretary-general, also urged an immediate end to violence in Gaza and Palestinian sniper and rocket attacks into Israel.
Zeev Boim, an Israeli cabinet minister, said that rather than condemning Israel's move, the UN should condemn Palestinian rocket attacks.
"I don't hear the UN's voice," he said.
Israeli air raids
Israel has continued to push ahead with its military offensive against Palestinian fighters in both Gaza and the West Bank in recent days.
|At least two Palestinians were killed and two |
wounded in Israeli air raids on Sunday [AFP]
Late on Sunday, at least two Palestinians were killed and two critically wounded in Israeli air raids in the northern Gaza Strip.
Hamas officials said that the target was a group of fighters who launched makeshift rockets into southern Israel.
The Israeli army confirmed carrying out the two missile strikes.
Around 230 Palestinian rockets and mortars have been fired over the border since Tuesday, according to the Israeli military.
At least 36 Gazans have been killed by Israeli fire in the past week.