United Nations chief Ban Ki-moon has pledged continued backing for Gazans living under a blockade, during a visit to reinvigorate the peace process, BBC reported.
He told Gazans that "we stand with you" as he visited a neighbourhood damaged by the Israeli offensive 14 months ago.
His visit to the region comes amid tension over Israel's plans to build more settlements in East Jerusalem.
Building materials are restricted under the blockade by Israel and Egypt, preventing rebuilding.
Israel imposed a tightened blockade after the Islamist Hamas movement seized power in June 2007.
Speaking in Gaza, Mr Ban said families were living under "unacceptable, unsustainable conditions".
Mr Ban said it was "distressing" for him to see damage to housing remaining, with no reconstruction possible under the blockade.
The blockade has prevented the UN from completing housing projects, but Mr Ban pledged to continue providing aid to Gazans,
"My message to people of Gaza is this: the United Nations will stand with you through this ordeal," he said.
'Path of non-violence'
Among a list of criticisms of Israel's policy, Mr Ban said the blockade was counter-productive as it prevented legitimate commerce and encouraged smuggling and extremism.
Mr Ban urged all Gazans to "choose the path of non-violence, Palestinian unity and international legitimacy".
He also called for a prisoner exchange involving Palestinian prisoners and Israeli soldier Gilat Shilad who was captured by militants in 2006.
His two-day visit is aimed at restarting the peace process, and comes just ahead of a visit by US special representative George Mitchell on Sunday to try to get indirect talks going between the Israelis and Palestinians.
The international community last week strongly condemned Israel's announcement of planning permission for 1,600 new homes in East Jerusalem, occupied by Israel since 1967.
Israeli Prime Minister Benjamin Netanyahu is to travel to Washington, where he is expected to meet Secretary of State Hillary Clinton and possibly President Barack Obama.
Meanwhile, violence in the West Bank continued on Saturday, with a Palestinian teenager shot dead and another badly hurt in clashes with Israeli troops near the city of Nablus, Palestinian medical officials said.
The Israeli military says its forces were responding to what it called a "violent riot" by Palestinian youths who were throwing stones at Israeli settlers, the BBC's West Bank correspondent Jon Donnison reports.
But it says no live bullets were fired, only tear gas and rubber bullets.