By Louis Charbonneau

UNITED NATIONS, Nov 21 (Reuters) - The U.N. humanitarian chief urged Israel on Friday to end what it called the "unacceptable" closure of border crossings with Gaza, as the United Nations stepped up its criticism in the latest exchange with the Jewish state.

"Measures which increase the hardship and suffering of the civilian population of the Gaza Strip as a whole are unacceptable and must cease immediately," U.N. Undersecretary-General John Holmes said in a statement.

U.N. Secretary-General Ban Ki-moon told Israeli Prime Minister Ehud Olmert by telephone on Tuesday that he was deeply concerned about the humanitarian situation in Gaza and asked him to permit U.N. aid workers into the territory.

On the following day Defense Minister Ehud Barak dismissed Ban's appeal, telling Israeli Army Radio: "No. There needs to be calm in order for the crossings to be opened."

In a separate statement, the U.N. press office said Ban "underscored the importance of having Israel urgently permit the delivery of humanitarian assistance to the civilian population of Gaza, and regrets that his calls have not yet been heeded."

Ban also reiterated "his condemnation of rocket and other attacks by Palestinian militants against Israeli civilian targets."

Israel closed Gaza after Palestinian militants responded with daily rocket salvos to an Israeli army incursion on Nov. 4 into the Hamas-run territory, where a 5-month-old, Egyptian-brokered ceasefire had largely been holding.

In addition to running out of food for 750,000 Palestinians, about half of Gaza's population, the United Nations Relief and Works Agency (UNRWA) said it would be forced after Thursday to suspend cash assistance to 98,000 poor Gazans because of a shortage of currency in the territory.

"The population endures daily electricity blackouts and shortages of cooking gas, fresh food and water," Holmes' U.N. Office for the Coordination of Humanitarian Affairs (OCHA) said in the statement.

Holmes also said UNRWA food distribution would probably be suspended again soon if supplies were not allowed into Gaza. The agency temporarily stopped distributing food in Gaza last week due to the Israeli blockade.

The OCHA statement said Holmes was especially worried "that the human dignity and well-being of the civilians in Gaza, over half of whom are children, do not appear to be a major issue for the parties to the conflict."

A rift between Palestinian President Mahmoud Abbas's Fatah faction and Hamas rivals widened last year after the Islamist group seized control of the Gaza Strip, home to around 1.5 million people. Fatah controls the Israeli-occupied West Bank. (Editing by Bill Trott)

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