UN Secretary General Ban Ki-moon has said more must be done to repair damage done in the Gaza Strip by Israeli military action one year ago, BBC reported.
Mr Ban said Gazans were being denied "basic human rights" and urged Israel to end its "unacceptable and counterproductive blockade".
He said Israeli well-being depended on conditions improving in the enclave.
Rallies are being held across Gaza to mark a year since the conflict, in which 1,400 Palestinians were killed.
In comments posted on the UN's website, Mr Ban said he was "deeply concerned that neither the issues that led to this conflict nor its worrying aftermath are being addressed".
He said that while levels of violence had been low in the past year, there was still no durable ceasefire after Operation Cast Lead and Gazans were "denied basic human rights".
"The quality and quantity of humanitarian supplies entering Gaza is insufficient, broader economic and reconstruction activity is paralysed," said Mr Ban.
Under Israel's blockade of Gaza, only basic humanitarian supplies are allowed in, meaning Gazans have not been able to obtain materials to repair damaged homes, buildings and infrastructure.
The UN Relief and Works agency (UNRWA) in Gaza told the BBC that public health was suffering as a result of inadequate and unsanitary water supplies, and there had been a rise in infant mortality.
UNRWA spokesman Christopher Gunness said thousands of tonnes of sewage were being pumped into the sea every day, because material for rebuilding treatment plants and other facilities was so scarce.
An international humanitarian aid convoy of some 200 vehicles is hoping to mark the anniversary by delivering supplies to Gaza.
The convoy is currently in Jordan, awaiting permission to cross the Red Sea and proceed to Egypt.
Hamas, which controls Gaza, is holding 22 days of rallies to mark the anniversary.
Senior leader Ahmed Bahar said Gazans remained "steadfast" after the conflict
"The resistance, which defended its land with honour, was not broken," the AFP news agency quoted him as saying.
Mr Ban called on Israel to end its blockade, uphold international law and make it possible for economic activity and civilian reconstruction to take place. He also urged Hamas to respect the law and bring an end to violence, and for all Palestinians to "work for unity".
He said there was "a sense of hopelessness in Gaza today for 1.5 million Palestinians, half of whom are under 18" and that "a fundamentally different approach to Gaza is urgently required".
"Their fate and the well-being of Israelis are intimately connected."
The BBC's Katya Adler in Gaza City said the mood on the anniversary of Operation Cast Lead was relatively quiet, but uneasy.
Both Israel and Palestinians in Gaza believe 2010 is bound to bring further violence, our correspondent adds.