Israel is in talks with Egypt and the EU over the electricity crisis in the Gaza Strip, as officials move to calm rising tensions between the Palestinian Authority and Hamas, daily newspaper Haaretz reported.

Israeli sources told the paper that they were holding talks both with Egypt and several unnamed European Union member countries.

The reported talks follow a Palestinian Authority request to Israel to cut the amount of electricity it supplies to Gaza by 40%, angry that the ruling Hamas movement continues to shirk from paying the bill. Palestinian Authority President Mahmoud Abbas is seeking to ramp up pressure on Hamas, his Fatah party’s bitter rival

On Sunday, the Israeli security cabinet decided it would cut the amount of power it supplies to Gaza.

Israeli Prime Minister Benjamin Netanyahu said that the electricity crisis was an "internal matter" between the rival Palestinian factions.

He said: "In recent days I have heard erroneous explanations regarding the issue of electricity in Gaza. It needs to be understood that the issue of electricity in Gaza is subject to a disagreement between the Palestinian Authority and Hamas. Hamas is demanding that the PA pay for the electricity and the PA is refusing to do so. This is an internal Palestinian argument. In any case, I would like to make it clear that Israel has no interest in escalation and any analysis to the contrary is mistaken. But we are interested in security and our policy on security is clear and unchanging."

The Security Council’s decision has yet to be implemented and the decision to do so may now be delayed. Israel now intends to supplying electricity only where they have received a payment pledge. The PA pays Israel £5.6m each month for electricity sent to Gaza and blames Hamas, which controls the Gaza Strip, for the severe power shortages there. Gaza residents currently have electricity between three and four hours a day.

The international community remains concerned about the situation and is looking for a solution to the dispute. This could mean Hamas forwarding the PA the money it charges Gaza residents for electricity, with the PA agreeing to pay Israel in return. Alternatively, diesel could be either purchased or donated by a foreign country for the Gaza power plant. The plant stopped operating in April after Hamas ran out of fuel and refused to purchase more from the PA, who had raised the tariff they were charging Hamas.

Arab media reports have claimed Egypt has offered to supply the electricity, but would ask Hamas to extradite 17 people wanted in Egypt for terrorism and arms smuggling in return. Egypt currently provides a small amount of power to Gaza.

Hamas first seized control of Gaza from Fatah in a violent coup in 2007. Since then Hamas have fought three wars with Israel, the most recent of which was in 2014.