Food deliveries to the Gaza Strip will be halted this week because of Israeli restrictions, the United Nations said.
Peter Hansen, the UN chief responsible for Palestinian refugees, said his agency was no longer allowed to take empty food containers out of Gaza.
Their loss added "intolerable costs to a programme already stung by underfunding", Mr Hansen complained.
An Israeli spokesman told BBC News Online suicide bombers had used containers for hiding in.
We have to pay [shipping companies] a fine of $20 per container per day, and this we simply cannot afford
Unrwa official Christer Nordahl
He said the perpetrators of a double suicide attack on 14 March, which killed 10 people in the Israeli port area of Ashdod, hid in containers to slip out of the Gaza Strip.
"At the moment we cannot trust anything, especially since the death of Hamas leader Sheikh Ahmed Yassin," the spokesperson said.
"We are exercising extreme caution."
The UN Relief and Works Agency (Unrwa) says it provides supplementary food aid for 600,000 Palestinians in the Gaza Strip.
It has already cut emergency rations in the occupied territories from 60% to 40% of daily requirements because of underfunding.
"We will have to discontinue food distributions as of Thursday as we can no longer cope with the inability to take containers out of Gaza," Unrwa chief Hansen told reporters on Tuesday.
He also said some aid workers could not enter the Gaza Strip anymore, because Israeli restrictions forced them to cross the border in exposed areas, "creating unacceptable risk and danger".
An agency official told BBC News Online the banned containers belonged to shipping companies contracted by the UN.
"We have to pay a fine of $20 per container per day, and this we simply cannot afford," Christer Nordahl said.
Unrwa will hold a conference in Geneva in June to discuss humanitarian assistance to Palestinian refugees.
Up to 70 countries and aid organisations are expected to attend - the first time in the agency's 54-year history that such a meeting has been held.