"Due to the continuous launching of incendiary balloons and kites from the Gaza Strip towards Israel, it has been decided tonight (Wednesday) not to allow access to Gaza's maritime space until further notice," a spokesperson for COGAT, a unit of Israel's defence ministry, said in a statement.
The move came after COGAT said on Tuesday it had reduced the extent of the fishing zone to six nautical miles offshore from 10 nautical miles, having downscaled it from 15 nautical miles a week ago.
A spokesman for the Israeli fire service said incendiary balloons from Gaza caused seven fires just on Tuesday.
In the past year, Palestinians have succeeded in setting fire to large areas of farmland in southern Israel.
Israel had only restored the fishing limit to 15 miles on June 4, after a previous reduction in response to fire balloons.
Continuous Israeli restrictions on Gaza's fishing industry have crippled the industry, with over 95 percent of fishermen living in poverty.
In 2007, Israel imposed a land, sea and air blockade on the strip, effectively turning the coastal enclave into an open-air prison, where basic necessities such as food, fuel and medicines are severely controlled.
Critics say the blockade amounts to collective punishment of the coastal enclave's two million residents.
The UN says Gaza will be uninhabitable by 2020, but human rights organisations say Gaza has already reached inhabitability.
Agencies contributed to this report.
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