A coalition of eight British-based human rights organizations on Thursday released a scathing report in claiming that the humanitarian situation in the Gaza Strip is at its worst point since Israel captured the territory in 1967.

The report said that more than 1.1 million people, about 80 percent of Gaza's residents, are now dependent on food aid, as opposed to 63 percent in 2006, unemployment is close to 40 percent and close to 70 percent of the 110,000 workers employed in the private sector have lost their jobs.

It also said that hospitals are suffering from power cuts of up to 12 hours a day, and the water and sewage systems were close to collapse, with 40-50 million liters of sewage pouring into the sea daily.

The report follows strident international condemnation of Israel after it struck hard against Palestinian militants in Gaza, killing more than 120 in the past week, including many civilians, after Palestinians militants escalated their daily rocket fire at Israel.

The rockets have killed 13 people, wounded dozens more, traumatized thousands and caused millions of dollars in damage. Last week longer-range rockets reached Ashkelon, a city of 120,000 people, about 17 kilometers north of Gaza, prompting the harsh Israeli response.

The Defense Ministry rejected the report, blaming the militant Hamas rulers of Gaza for the hardships.

"Israel has the right and obligation to protect its citizens, but as the occupying power in Gaza it also has a legal duty to ensure that Gazans have access to food, clean water, electricity and medical care," said Amnesty International U.K. Director Kate Allen, one of groups behind the report. "Punishing the entire Gazan population by denying them these basic human rights is utterly indefensible. The current situation is man-made and must be reversed."

The Foreign Ministry issued a report denying Israeli culpability in the humanitarian situation in the Gaza Strip, saying human rights groups "should point their criticism towards the Hamas terrorist organization that controls the Gaza Strip, and not against the State of Israel."

The 16-page report - sponsored by Amnesty, along with CARE International U.K., CAFOD, Christian Aid, Medecins du Monde UK, Oxfam, Save the Children U.K. and Trocaire - calls on the British government to exert greater pressure on Israel and to reverse its policy on not negotiating with Gaza's Hamas rulers.

Israel and the West shun Hamas and label it a terrorist organization. Hamas does not accept the presence of a Jewish state in an Islamic Middle East and has sent dozens of suicide bombers into Israel, most recently a month ago.

The report adds that it considers Israel's blockade of Gaza as unacceptable and illegal collective punishment.

Replying to the report, the Defense Ministry said it was misdirected.

"The main responsibility for events in Gaza - since the withdrawal of Israel from the territory and the uprooting of the settlements there - is the Hamas organization, to which all complaints should be addressed, read a statement a spokesman," Maj. Peter Lerner.

This week NGO Monitor, a Jerusalem-based watchdog, called on human rights groups to end what it called their political use of international law. It cited an Amnesty International press release that it said made unsubstantiated accusations that Israeli responses are being carried out with reckless disregard for civilian life.

"NGOs and human rights groups must end their irresponsible and immoral use of legal rhetoric," said Gerald Steinberg, Executive Director of NGO Monitor. "False claims of disproportionate force and collective punishment by Amnesty International and Human Rights Watch make a mockery of international law."