Palestinian gas stations began shutting down and motorists lined up at pumps after an Israeli fuel company cut off deliveries Wednesday, deepening the humanitarian crisis in the West Bank and Gaza Strip that has followed Hamas' rise to power.

An end to fuel supplies could cripple hospitals, halt food deliveries and keep people home from work — a devastating scenario for an economy already ravaged by Israeli and international sanctions.

Countrywatch: Israel

Dor Energy, the Israeli company that is the sole fuel provider to the Palestinians, cited growing debts for its decision, Palestinian officials said.

Mujahid Salame, head of the Palestinian petrol authority, predicted fuel supplies would run out in many areas by Thursday. "If this happens, there will be a humanitarian crisis," he said.

Dor officials declined comment. The company has been the sole provider of gasoline to the Palestinian areas since interim peace agreements were signed in the mid-1990s.

In Gaza City, motorists formed long lines at filling stations in anticipation of a fuel crunch. Though station owners said they still had several days of reserves, some limited purchases to conserve supplies.

"I bought more than I need because I want to guarantee that I can reach work again," said Osama Shaban, 33, a construction engineer who drives 10 miles to work each day.

Dr. Moaiya Hassanain, a top Health Ministry official in Gaza, warned that the area's hospitals, already suffering from a shortage of medicines, would cease to function without fuel.

He said ambulances would stop running, employees wouldn't be able to get to work and gas generators — used to compensate for ongoing electric outages — would be hobbled.

"It's going to be a disaster for us in the medical profession," he said, speaking at a Gaza City gas station where helped fill the gas tanks of several ambulances.

In the West Bank, the situation was even more dire. Many stations said they were out of fuel, in some cases laying their dry nozzles on the ground.

"The only thing I've been doing for the past day is tell drivers that I don't have any gas," said Awad Dabous, who works at a gas station in the West Bank town of Jenin. A sign at the station said simply: "Sorry, no gas."

In Nablus, a line of taxi drivers said they had stopped working because they had no fuel. One driver, Mahmoud Tourabi, said he would try to drive to a nearby Jewish settlement in hopes of filling his tank.

"They may kill me there, so I will be the martyr of the gas," he quipped.

The fuel crunch is the latest sign of trouble for the Palestinian economy, which has been hit hard by a cut-off in Western aid. The donors halted the money flow in response to Hamas' victory in legislative elections, demanding the group renounce violence and recognize Israel. The U.S. and European Union, the two biggest donors, consider Hamas a terrorist group.

The group has rejected the demands, despite a financial crisis that has left it unable to pay the salaries of thousands of government workers for two months.

Instead, it has raised some $70 million from Iran and Arab donors. Under U.S. pressure, banks have refused to transfer the funds to Hamas, and the money remains stuck in an account in Egypt.

Compounding Hamas' woes, Israel has cut off about $55 million in monthly transfers of tax money it collects for the Palestinians. Israel has placed the money in escrow.

Israel dipped into this money last month to pay Palestinian bills to government-owned companies, such as the Israeli electric monopoly. The Palestinians rely on Israel for many key supplies, including fuel, electricity and water.

Asaf Shariv, a spokesman for Prime Minister Ehud Olmert, said Israel would "absolutely not" bail out the Palestinians in this case. Dor has threatened to cut off supplies twice before this year — only to be paid at the last minute by the Palestinians.

Shariv said that since the Palestinian government resells gasoline to consumers, there is no reason for it not to have money to pay its debts. Palestinian officials said the cash-strapped government is one of the biggest users of gasoline and unable to pay the bill.

Israeli Foreign Minister Tzipi Livni said Wednesday that Israel would consider releasing the tax funds for humanitarian projects, However, she told Channel 10 TV, the money could not go to the Palestinian Authority.

Palestinian officials and the World Bank say a humanitarian disaster is looming. Palestinians have been taking out loans, cutting back and selling valuables to scrape by. But officials say the situation can't continue much longer.

Fearing catastrophe, the "Quartet" of Mideast peace makers — the U.S., EU, United Nations and Russia — agreed Tuesday to restore some humanitarian aid to the Palestinians, as long as the money isn't handled by Hamas. But it remains unclear when the money will start flowing, how much will be sent and who will administer the money.

In Brussels, European Commission spokeswoman Emma Udwin said more work was needed before the new mechanism would start to channel funds to the Palestinians. She said there is no timeline, only that "we want this to move as soon as possible."

Hamas said it welcomed any aid, but expressed regrets that the Quartet attached strings. Israeli officials said they had no objections to humanitarian aid reaching Palestinians, provided it is kept out of the hands of Hamas.

Olmert has said he would be willing to negotiate with Hamas if the group accepts the international community's demands to end its violent campaign against the Jewish state. With Hamas refusing to budge, however, Olmert says he is prepared to draw Israel's borders on his own.

Justice Minister Haim Ramon on Wednesday gave Hamas until the end of the year to prove it is willing to negotiate a peace deal.

"If it becomes clear by the end of the year that we really have no partner, and the international community is also convinced of this, then we will take our fate into our own hands and not leave our fate in the hands of our enemies," he told Israel's Army radio.

Ramon, a close associate of Olmert, was the first Israeli official to set a deadline for Hamas.