Ban: Israeli siege of Gaza 'causes unacceptable sufferings' to Palestinian civilians.

KHAN YUNIS, Gaza - UN chief Ban Ki-moon slammed Israel's blockade of the Gaza Strip during a tour of the war-battered coastal territory on Sunday, saying it was causing "unacceptable sufferings."

"I have repeatedly made it quite clear to Israel's leaders that the Israeli policy of closure is not sustainable and that it's wrong," Ban told reporters in the southern Gaza Strip town of Khan Yunis.

"It causes unacceptable sufferings to... the people and population" of Gaza, he said, adding he was saddened to see that teenagers and children were the worst affected.

"This policy is also counterproductive. It prevents legitimate commerce and encourages smuggling. It undercuts moderates and empowers extremists."

The UN chief crossed into the besieged territory earlier Sunday, expressing solidarity with the plight of the Palestinians and urging Israel to end its tight blockade.

This was his second visit to the impoverished Gaza Strip since Israel's 22-day offensive on Gaza ended in January 2009.

Ban toured some of the hardest-hit areas of Gaza before inaugurating projects to build 150 homes, a flour mill and a sewage treatment plant.

However, Ban said more reconstruction was needed, calling the projects a "drop in the bucket."

"I have seen much damage (to many) houses, it is quite distressing," he said.

In the Israeli-occupied Palestinian West Bank on Saturday, the UN Secretary General had said his visit to Gaza was to show support for Palestinians.

"I'll go to Gaza... to express my solidarity with the plight of the Palestinian people there and to underscore the need to end the blockade," Ban told reporters.

He said in Khan Yunis that "the United Nations will stand with you through this ordeal" and continue to deliver humanitarian aid.

But he also urged all Gazans "to choose the path of non-violence."

Ban had insisted ahead of a meeting with Israeli President Shimon Peres on Saturday that the closures imposed "unacceptable hardships" on civilians.

"I am confident the blockade can be lifted while addressing Israel's legitimate security concerns."

The closures have prevented the rebuilding of thousands of homes that were damaged or destroyed by Israel.

The military offensive in December 2008 and January 2009 ended with an Israeli-Hamas ceasefire.

Hamas has taken steps to rein in the rocket fire since the war, and a deadly attack was claimed by a radical Al-Qaeda-inspired group which has clashed with Hamas in the past.

Israel, which wants to crush any Palestinian liberation movement, responded to Hamas's win in the elections with sanctions, and almost completely blockaded the impoverished coastal strip after Hamas seized power in 2007, although a ‘lighter’ siege had already existed before.

Gaza is still considered under Israeli occupation as Israel controls air, sea and land access to the Strip.

Ban's visit came on the heels of a statement by the Middle East diplomatic Quartet -- the United States, United Nations, European Union and Russia -- ordering Israel to halt all settlement activity.

Ban said the international community "strongly supports" Palestinian efforts to build an independent state, and reiterated that all Israeli settlement activity is illegal.

Meanwhile, Israeli troops shot dead a young Palestinian protester who throwing stones and critically wounded another in the West Bank, Palestinian medics and security officials said.

Israeli troops entered the village as fighting broke out between indigenous Palestinian villagers and radical Jewish settlers at nearby Bracha.

Villagers said the clash broke out when illegal settlers attacked the village and was unrelated to the organised protests against Israeli settlements that have rippled through the West Bank and East Jerusalem over the past week.

But the Israeli army said the Palestinians had been heading for the settlement and had hurled stones at soldiers trying to stop them. Troops had used tear gas and rubber bullets but not live rounds, an army spokesman said.

In an interview with the Germany weekly Spiegel to be published on Monday, Israel's extremist Foreign Minister Avigdor Lieberman said East Jerusalem will remain part of part of the Israeli capital.

"Jerusalem is not negotiable," he said.

Lieberman said that "We now expect the Americans to put pressure on the Palestinians".

Israel occupied Palestinian East Jerusalem in 1967 and calls all of Jerusalem its "eternal and indivisible" capital, contrary to international law which states land cannot be legitimately won through invasion or occupation.

East Jerusalem is considered by the international community to be illegally occupied by Israel, in contravention of several binding UN Security Council Resolutions.

In these resolutions, the United Nations Security Council has also called for no measures to be taken to change the status of Jerusalem until a final settlement is reached between the sides.

Declaring Jerusalem as Israel's capital is an attempt to change this status, and is thus a violation of these resolutions.

All Jewish settlements are illegal under international law because they are built on Arab land (mainly Palestinian), illegally occupied by Israel since 1967.

Around 200,000 illegal Jewish settlers are estimated to have moved into the dozen or so Israeli settlements in Palestinian East Jerusalem.