GENEVA, Sept 21 (Reuters) - U.N. High Commissioner for Human Rights Louise Arbour on Friday urged Israel to exercise restraint in its dealings with the Hamas-led Gaza Strip. In a statement voicing concern at Israel's decision on Wednesday to declare Gaza an "enemy entity", Arbour said that reducing fuel and power to the tiny territory would place an "unbearable burden" on its 1.5 million people. The former United Nations war crimes prosecutor and Canadian Supreme Court judge also condemned the indiscriminate firing of rockets into Israel by Palestinian militants in Gaza. Arbour reminded Israel of its obligations under international humanitarian and human rights law not to use disproportionate means or resort to collective punishment. Gaza had already paid a "heavy price" from daily violence, isolation and deprivation, she said. On Thursday, Arab and Islamic countries speaking at the U.N. Human Rights Council condemned Israel's stance towards Gaza and accused Israeli forces of killing Palestinian civilians, detaining parliamentarians and destroying property. U.S. Secretary of State Condoleezza Rice said on Thursday she was optimistic that Palestinians and Israelis could agree to a joint document on the tough issues dividing them ahead of U.S.-led peace talks, expected to take place in mid-November.