The decision is seen as part of an attempt by the Palestinian Authority to pressure Hamas into new elections.
The Palestinian Authority says it will stop paying Israel for the electricity it supplies to Gaza.
It's the latest effort by Palestinian President Mahmoud Abbas to pressure Hamas into new elections.
Hamas says the action is a crime against Palestinians and has warned it will consider a number of options to defend its people.
The standoff has divided Palestinians and hampered attempts to reach a peace deal with Israel.
And now many are worried it may turn violent.
TRT World's Chelsea Carter explains.