The decision by the US, UK and other western nations to freeze ­funding for the UN’s agency for Palestinian refugees will significantly worsen the humanitarian crisis in the Gaza Strip, Palestinians have warned. Britain, Germany, Italy, the Netherlands, Switzerland and Finland joined the United States, Australia and Canada in pausing funding after UNRWA, the UN’s Relief and Works Agency for Palestine, revealed an investigation had been launched into 12 members of staff who allegedly took part in the 7 October attack led by Hamas that killed 1,140 people. Israel’s retaliatory war has killed 26,000 people and sparked a dire humanitarian crisis, with about 85% of the strip’s population of 2.3 million displaced from their homes. The agency’s commissioner general, Philippe Lazzarini, on Saturday called the decision to suspend funds shocking and urged the countries involved to reverse course. “These decisions threaten our ongoing humanitarian work across the region including and especially in the Gaza Strip,” he said. On Friday, Lazzarini had said that Israel provided UNRWA with evidence that agency staff had been involved on 7 October. “I have taken the decision to immediately terminate the contracts of these staff members and launch an investigation in order to establish the truth without delay,” he said. “Any UNRWA employee who was involved in acts of terror will be held accountable, including through criminal prosecution.” But Lazzarini’s statement was not enough to prevent some of the organisation’s biggest funders from pausing their support. The UK Foreign Office soon followed the US, Australia and other major allies in freezing its funding to the agency. “The UK is appalled by allegations that UNRWA staff were involved in the 7 October attack against Israel, a heinous act of terrorism that the UK government has repeatedly condemned,” a spokesperson said. “The UK is temporarily pausing any future funding of UNRWA while we review these concerning allegations. We remain committed to getting humanitarian aid to the people in Gaza.” Palestinians and aid workers criticised the move, arguing that pausing aid could have catastrophic consequences. “Sanctioning UNRWA, which is barely keeping the entire population of Gaza alive, for the alleged ­responsibility of a few employees, is tantamount to collectively punishing the Gazan population, which is living in catastrophic humanitarian ­conditions,” Johann Soufi, a lawyer and former director of the agency’s legal office in Gaza, told Agence-France Presse. UNRWA, formed in 1949 after the creation of Israel, supports more than 5.6 million Palestinians in the occupied territories, including Jerusalem, and refugees and their descendants in Syria, Lebanon and Jordan. It has struggled to raise funding in recent years, an issue dramatically exacerbated by Donald Trump’s 2018 decision to cut US support. That was restored by the Biden administration, which is the agency’s biggest donor, providing $340m in 2022, but the state department said Friday it had “temporarily paused additional ­funding” while it reviewed the claims. Six other western countries quickly followed suit. Torrential rain over the weekend in Gaza has made it clear how desperately humanitarian aid, much of which is facilitated by UNRWA, is needed. Footage from makeshift camps in the south of the strip showed flimsy cloth and tarpaulin tents collapsing in flooding and mud. Nasser hospital in Khan Yunis – the largest hospital still functioning in the strip – was reportedly completely without power overnight. The local health ministry said that 174 people were killed and 310 injured in the past 24 hours. Hussein al-Sheikh, the head of the Palestine Liberation Organisation, also called for donor countries to immediately reverse their decisions, which he said entail “great political and humanitarian relief risks”. “At this particular time and in light of the continuing aggression against the Palestinian people, we need the maximum support for this international organisation and not stopping support and assistance to it,” he said. The funding freeze also drew condemnation from Hamas. “It’s clear that UNRWA is subject to blackmail by countries that support Israeli terrorism. While Palestinians in the Gaza Strip are facing mass extermination – even according to [the international court of justice],” it said in a statement, referring to the ruling from the UN’s top court that Israel must prevent acts of genocide in Gaza. A total of 136 UN employees have been killed in Israel’s almost four-month-old offensive, and relations between UNRWA and Israel – frosty at the best of times – have deteriorated after an attack on an UNRWA shelter in Khan Younis last week that killed 13 people. The agency said Israeli tank fire had hit the building where 800 ­people were seeking refuge. The Israeli army said the incident was under review, and that it was possible the strike was a “result of Hamas fire”. The crisis could also impact the UN agency’s operations in Jerusalem and the West Bank. Earlier this month, it was told by the Israel Land Authority to vacate a compound in occupied East Jerusalem, and issued a fine for missing building permits. Israel’s foreign minister, Israel Katz, said in a rare statement yesterday, the Jewish holy day, that the country would take steps to remove UNRWA from the Gaza Strip after the war. “We have been warning for years: UNRWA perpetuates the refugee issue, obstructs peace, and serves as a civilian arm of Hamas in Gaza,” he said. Mairav Zonszein, a senior analyst at the International Crisis Group thinktank, said on X, formerly Twitter: “Israel has been building a case against UNRWA for a long time. It said weeks ago it wants it phased out of Gaza.” “Regardless of the veracity of the charge, the decision to go with this news last night seems like an attempt to distract from the ICJ ruling on ­genocide in Gaza.”