By Nidal al-Mughrabi GAZA, July 19 (Reuters) - Children raced to help parents collect food from U.N. aid distribution centres in the Gaza Strip as women sat in the shade near trucks, waiting for their names to be called to receive their food rations. The enclave's isolation has deepened since the Islamist Hamas group routed their Western-backed rivals to seize control last month. Israel, effectively at war with Hamas, has sealed off key border crossings, stifling trade and forcing thousands of Palestinians to seek handouts from U.N. aid bodies. The U.N. aid agency for Palestinian refugees says that up to 825,000 of Gaza's 1.5 million inhabitants, classed as refugees, currently receive food rations, and the U.N. World Food Programme aids a further 200,000 people. As U.N. Secretary-General Ban Ki-moon prepared to meet fellow members of the Quartet of mediators in Lisbon on Thursday, Palestinians urged the United Nations Relief and Works Agency (UNRWA) to widen its programme to feed more people. "We now have only God and then UNRWA," said Ahmed al-Jammal, a father of five, inside an aid centre in Gaza City. "We have no other source of income," he said as he received sacks of flour and rice and bottles of cooking oil. UNRWA Commissioner-General Karen AbuZayd also urged the Quartet powers to act to ease an effective trade embargo on the Strip and send their new envoy Tony Blair to visit. "If the economy doesn't work ... then we will have to have food for many more people," she said in an interview. Families used vehicles and donkey carts to transfer the supplies to their homes. Palestinians in Gaza say they receive similar aid packages every three months. Saeed Darwish, a father of 10, said U.N. food aid had become the "lifeline" for hundreds of thousands of Palestinians. "There are many families who are in need of your help and they do not get it," Darwish said as sacks of flour piled in front of him. Israel has kept the crossings on its border with Gaza under tight control since it pulled out of the territory in 2005. But a refusal to deal with Hamas by Israel, Egypt and the Palestinian Authority led by President Mahmoud Abbas in the West Bank has meant major crossing points, including the main freight terminal with Israel at Karni, have been effectively closed since June's fighting between Hamas and Abbas's Fatah faction. Israel says it cannot ensure its security at the crossings. UN APPEALS The U.N. has repeatedly appealed to Israel to open the crossings more regularly. The group's Gaza director, John Ging, warned that "Gaza would become a nearly totally aid dependent population" if the closures continued. He said UNRWA did not have the funds to meet demands for additional aid for more Gaza residents, adding that lifting the closure could help reduce the number of those eligible for it. Umm Saleh, wearing traditional Muslim attire that covered most of her face, said her family, including seven children, depended on UNRWA aid but had other things to worry about. "We need money, we have children who study at schools and universities, they need clothes and stationery," she said at another aid distribution centre in Khan Younis in southern Gaza. Factories have begun shutting down amid the closures, making hundreds of workers unemployed. Shortages of building materials had frozen construction projects and the inability to export helped drive some 3,000 businesses to the wall last month alone. Palestinian economists estimate that at least 70,000 workers have lost their jobs in the Gaza Strip since Hamas routed Fatah forces in June, further aggravating unemployment. Mohammad Al-Telbani said he had to reduce the number of workers in his biscuit factory to 150 from 400 and to work for 10 days a month instead of 26 due to raw materials shortages. Naser al-Helo, who is barely able to keep his business open, said the economic hardships were leaving Gazans desperate. "The siege of Gaza is destroying our economy, our communities and our sense of hope in the future," he said. "It is radicalising the people of Gaza making your vision of bringing peace to the Middle East ever more distant dream."