Israel will reduce the electricity supply to Gaza after officials in the Palestinian government in the West Bank said payments would be scaled back.
Maj Gen Yoav Mordechai of the Israeli defence body COGAT said the move is due to "internal problems" between Gaza's Hamas rulers and Palestinian president Mahmoud Abbas.
He did not say when electricity would be reduced.
Mr Abbas has threatened to exert financial pressure on Hamas, his main political rival, and Palestinian officials said earlier this month that payments would stop.
The Islamic militant group seized Gaza in 2007, driving out Mr Abbas' forces.
Gaza has suffered increasing hardship since the Hamas takeover, which triggered a border blockade by Israel and Egypt.
Gazans endure long power cuts, with electricity now available for four hours a day.