* Israel's Gaza blockade is illegal, UNRWA chief says.
* Appeals to Egypt to ease passage at Rafah border crossing
By Nidal al-Mughrabi
GAZA, March 25 (Reuters) - The outgoing head of the U.N. agency that aids Palestinian refugees urged Israel and Egypt on Tuesday to lift their border restrictions on the Hamas Islamist-run Gaza Strip.
Filippo Grandi, commissioner-general of the United Nations Relief and Works Organization (UNRWA), said Israel and Egypt had legitimate security concerns but that the plight of the 1.8 million Palestinians in Gaza should also be taken into account.
"I think the world should not forget about the security of the people of Gaza," he said. "Their security is worth the same as everybody else's security so we appeal to the humanitarian sense of all."
Israel tightened curbs on the movement of people and goods at the Gaza border in 2007 after Hamas, which won a Palestinian election a year earlier, wrested control of the enclave from forces loyal to Western-backed President Mahmoud Abbas.
Israel, which maintains a naval blockade of Gaza in a declared bid to prevent arms from reaching militants, has eased overland restrictions since 2010 but continues to block most exports from the territory. Palestinians say goods coming in through the lone commercial crossing with Israel meet only 35 to 50 percent of their needs.
Egypt has meanwhile clamped down on smuggling tunnels in the Sinai desert that served as a commercial lifeline for Gaza.
The military-backed government that toppled the Muslim Brotherhood, Hamas's ideological kin, in Cairo last year deems the Palestinian faction a security threat, although Hamas insists its hostility is directed exclusively at Israel.
Israel's blockade, Grandi said, is "illegal and must be lifted". He said that while Israel had allowed importation of building materials for a limited number of UNRWA-run projects, another $150 million in new construction was still blocked.
"I also want to make a strong appeal for export to resume because the lack of export is the main reason for the poverty of Gaza," said Grandi, who leaves his post next week.
Official Palestinian statistics put Gaza's unemployment rate at nearly 40 percent. UNRWA says 80 percent of the population of Gaza receives aid.
Grandi, an Italian who was appointed UNRWA chief in 2010, also urged Egypt to open its Rafah crossing with Gaza, especially for those seeking medical treatment and students.
In the past 45 days, Egypt has opened the passage three times to allow some pilgrims to travel to Saudi Arabia.
(Editing by Jeffrey Heller and Catherine Evans)