* Sanctions close crossing, shrink fishing zone
* Hamas decries measures as "new Israeli crime"
* Gaza border protests in fourth month, 136 dead (Adds details, Hamas statement)
By Dan Williams
JERUSALEM, July 9 (Reuters) - Israel imposed sanctions on the Gaza Strip and its dominant Hamas Islamists on Monday in retaliation for attacks by Palestinians using burning kites and helium balloons carrying blazing rags.
, vexing its advanced military which is used to dealing with more conventional weapons.
With southern residents and his far-right coalition partners calling for an end to the blazes, even if that required killing the kite- and balloon-fliers, Israeli Prime Minister Benjamin announced the closure of Gaza's main commercial border terminal.
Israel also cut the area fishing boats are allowed to operate off Gaza's Mediterranean coast and blacklisted what it described as a pro-Hamas TV channel.
"We will crack down immediately on the Hamas regime in the Gaza Strip," Netanyahu told his parliamentary faction, to applause from lawmakers.
Wildfires have razed 7,000 acres of forests and farmland, Israel says.
The kites and balloons are the most effective weapon in the so-called "Great March of Return" protests that began on March 30 and which have met an often lethal Israeli army response. Gaza medics say 136 Palestinians have been shot dead.
Organisers say the Gaza demonstrations aim to press demands such as for a right to lands lost to Israel in the 1948 war of its foundation and for an Israeli-Egyptian blockade to ease.
Israel deems the protests a bid by Hamas to deflect scrutiny from Gaza's governance problems and provide cover for armed border attacks.
Hamas decried Monday's measures as "a new Israeli crime against humanity".
"Hamas urges the international community to immediately intervene," said Fawzi Barhoum, spokesman for Hamas, which is deemed a terrorist group by Israel and the West.
The shuttered Kerem Shalom crossing is Gaza's main conduit for trade - albeit under years of Israeli restrictions. Israel said some humanitarian goods would still be allowed through the terminal.
An Israeli military statement said the Palestinian fishing zone off Gaza would revert to 11 km (6 miles) after being temporarily expanded to 17 km (9 miles).
Al-Quds, a Palestinian satellite TV station, was declared a terrorist organisation by Israeli Defence Minister Avigdor Lieberman, who called it a "Hamas propaganda arm". That put the station's staff - including 15 in the Israeli-occupied West Bank and a freelancer in Jerusalem - at risk of arrest by Israel.
Lieberman said Israel did not seek a new Gaza flare-up.
"But the way Hamas is conducting itself - it is simply liable to spiral out of control, and it is liable to pay the whole price, a much, much heavier price" than in the last Gaza war, in 2014, he told reporters.
(Additional reporting by Nidal al-Mughrabi in Gaza; Editing by Janet Lawrence and Andrew Heavens)
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