Attorney General Menachem Mazuz said the plan to reduce power to Gaza needed further scrutiny.
"The attorney general has approved the cabinet's decision to activate various economic steps...(but) further consideration needs to be given to cutting off electricity because of the humanitarian implications on the civilian population," a justice ministry statement said.
Defence officials had said gas supplies were being cut by up to 14 per cent, depending on the type of fuel.
A European Union commissioner said she understands the distress caused by makeshift rocket attacks from Gaza, which have killed two Israelis this year.
But Benita Ferrero-Waldner warned against imposing "collective punishment" on the 1.5 million Palestinians in the coastal strip.
An official from the EU, which funds fuel oil to Gaza's only electricity generating plant, said deliveries were down by about a quarter on Sunday but it had stocks for about seven days of operation.
Israeli defence officials said the power plant would receive enough fuel to continue operating.
Israeli Infrastructure Minister Binyamin Ben-Eliezer said on Israel Radio: "What is the alternative? ... Our duty first and foremost, despite all the name-calling, is to protect our people."
Hamas, which seized the Gaza Strip by force from rival Fatah in June, condemned what it called Israel's "blackmail" and forecast an "explosion" that would have an effect across the Middle East.
Also Yuval Diskin, head of Israel's Shin Bet internal security agency, told a parliamentary committee the Palestinians are "exhausted" and lack the will for a popular uprising against occupation if a coming peace conference fails to meet their expectations.
And in Gaza three Palestinians and an Israeli soldier were killed in clashes, Palestinian officials and the Israeli army said.