The 139-square mile area has a shortage of clean water, intermittent power shortages and sewer pipes discharging waste water. Palestinian officials said 60 construction companies in Gaza were struck by Israeli air fire.
Hatem Hassouna, owner a factory making paving stones and concrete, told CNN he was unaware why his facility was a target for airstrikes, noting his only customers were the United Nations and other aid groups.
"You can't rebuild Gaza again until these kind of factories rebuild," Hassouna said, standing in the building's wreckage.
"We are not following Hamas policies, we are following Israeli policies. They destroyed our business, they destroyed our factories. And they want peace? How?"
The U.N. Office for the Coordination of Humanitarian Affairs said 16,700 homes in Gaza were destroyed or severely damaged, rendering over 100,000 people homeless of a population of 1.8 million. It estimated rebuilding the homes would cost $455 million.
Israel limits the amount of construction material brought into Hamas. The Israel Defense Forces noted much of it has been used to build tunnels extending into Israel and Egypt for conducting terrorist raids and smuggling weapons, instead of projects like the construction of schools and hospitals.
It is regarded as a sticking point in negotiations between Hamas and Israel in Cairo as the truce winds down to its Wednesday deadline. Israel seeks to connect the rebuilding of Gaza to its demilitarization, a point on which Hamas disagrees.
Sanctions against Gaza would be eased if "all aggression from Gaza stops," said Israeli government spokesman Mark Regev. "I believe if the Palestinians, if Hamas ceases violence, ceases to target Israeli citizens, then anything is possible."