The head of the Palestinian petrol commission, Mujahid Salame, said he expected gasoline supplies to run out by Thursday. "If this happens, there will be a humanitarian crisis," he said.

He said Palestinian President Mahmoud Abbas was in touch with American and European diplomats in hopes of pressuring Israel to ensure the flow of fuel to the Palestinian areas.

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

Salame said the Palestinians owe about $26 million to Dor, but he accused the company of taking a political decision aimed at punishing the Hamas-led Palestinian government.

Israel has stopped about $55 million in monthly tax transfers to the Palestinians, demanding that the militant Islamic group renounce violence and recognize the Jewish state. The tax money has been placed in escrow.

Last month, Israel used this money to pay Palestinian debts owed to government-run companies like the Israeli electric company.

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

Israeli economic pressure, along with a cutoff in aid by Western donors, has left the Hamas government unable to pay its bills and thousands of civil servants without salaries.

Western powers agreed Tuesday to restore humanitarian aid to the Palestinian areas, as long as the money doesn't reach Hamas. But it remained unclear when the money will begin flowing.