The arson attacks have led to increasing alarm among Israeli residents and farmers near the blockaded Gaza Strip and demands that authorities take action.
"No exports or marketing of goods will be carried out from the Gaza Strip." It added that the move was also due to "additional terror attempts," referring to infiltrations and other incidents along the Gaza border.
The crossing, known as Kerem Shalom, is to remain closed until further notice.
Israeli authorities say the hundreds of arson kites and balloons sent over the border fence from the Hamas-run Gaza Strip have caused major damage to farms in the area.
A spokesman for Israel's fire service says 750 fires have burned 2,600 hectares, putting the damage at millions of shekels (hundreds of thousands of dollars/euros).
A month ago, the government estimated the damage at five million shekels.
Gazans began launching the kites in April amid mass protests along the border calling for Palestinian refugees to be able to return to their former homes now inside Israel.
Palestinians see the strategy as a way of inflicting economic damage on Israel in protest without risking their lives by approaching the border fence.
Since protests and clashes broke out along the Gaza border on March 30, at least 139 Palestinians have been killed by Israeli fire.
The majority were involved in protests and clashes, but others were seeking to breach or damage the border fence.
No Israelis have been killed.
The closed crossing is the only one between Gaza and Israel for goods transport. A separate crossing, known as Erez, is for people.
Israel, which has fought three wars with Islamist movement Hamas since 2008, strictly controls both crossings.
UN officials and rights activists have repeatedly called for Israel to lift the blockade against Gaza, citing deteriorating humanitarian conditions.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)