Major Donors Pause Funding for U.N. Agency as Scandal Widens

Germany, Britain and at least four other countries said Saturday they were suspending funding for the United Nations agency that provides food, water and essential services for Palestinian civilians in the Gaza Strip, many of whom have been described as being on the brink of starvation after 16 weeks of war between Israel and Hamas.

The countries joined the United States, which said on Friday it would withhold funding for the group, the United Nations Relief and Works Agency, or UNRWA, after a dozen of its employees were accused by Israel of participating in the Oct. 7 attacks.

The United Nations has not made public the details of the accusations against the UNRWA employees, who have been fired, but a senior U.N. official, briefed on the accusations called them “extremely serious and horrific.”

The Israeli military said in a statement Saturday that its intelligence services had compiled a case “incriminating several UNRWA employees for their alleged involvement in the massacre, along with evidence pointing to the use of UNRWA facilities for terrorist purposes.” It did not elaborate on what that involvement entailed.

In announcing the pause in funding, the United States, the agency’s largest donor, said it was reviewing the allegations “and the steps the United Nations is taking to address them.”

The governments of Australia, Canada, Finland and Iceland also said they were suspending funding for the agency.

Philippe Lazzarini, the head of UNRWA, called the suspension “collective punishment” for Gaza and warned that if funding were not restored it would adversely affect its humanitarian assistance program.

“It is shocking to see a suspension of funds to the agency in reaction to allegations against a small group of staff,” he said in a statement, “especially given the immediate action that UNRWA took by terminating their contracts and asking for a transparent independent investigation.”

For months, American intelligence agencies have been aware of vague allegations that some among UNRWA’s 13,000 employees may have been working with Hamas or even potentially involved in the Oct. 7 terror attack. It was only this week, American officials said, that the United Nations and Israel shared detailed, specific intelligence with the State Department and White House, including the names of the individuals who were fired.

American officials said the tough U.S. statement and action to withhold funding from the aid agency was not a result of any formal review of the Israeli intelligence by American spy agencies. Officials said that because the U.N. aid agency fired the individual was proof that the information provided by the Israelis was compelling.

Some donor countries, like Ireland and Norway, said the agency’s work was too important to cut off.

Micheál Martin, Ireland’s foreign minister wrote on social media that UNRWA’s staff members had provided lifesaving assistance “at incredible personal cost.”

Norway said accusations against the staff members, if true, were “completely unacceptable,” but said the agency was the “most important humanitarian organization” in Gaza and, like Ireland, vowed continued support.

“We need to distinguish between what individuals may have done and what UNRWA stands for,” the Norwegian delegation to the Palestinian Authority said on social media.

Israel’s accusations against the 12 U.N. employees are the latest episode of decades-long friction between Israel and UNRWA.

Israelis say that UNRWA’s existence separate from the wider U.N. refugee protection system prevents Palestinian refugees from setting down roots elsewhere in the Middle East. There have also been regular clashes between Israel and UNRWA over what the agency’s schools teach their students, and UNRWA’s relationship with Hamas.

On Saturday, Israel’s foreign minister, Israel Katz, welcomed the decisions by the United States and Canada, and called for UNRWA to stop its work in Gaza after Israel’s military campaign there was over.

Israel aims to ensure that “UNRWA will not be a part of the day after,” Mr. Katz said on social media, referring to the end of the war.

But the suspension of potentially hundreds of millions of dollars in funding could not have come at a worse time for Gazans, who are faced with the continued bombardment by the Israeli military and an ever spiraling humanitarian catastrophe of hunger and disease, made more difficult by wintry conditions.

The agency, one of the largest employers in the enclave, has been a vital lifeline for Palestinians in Gaza for decades. It has played an even more crucial role in providing food, water, aid and services since the war in Gaza began.

Nearly 600,000 Palestinian residents of the territory are facing catastrophic hunger and starvation in Gaza, according to the World Food Program. More than 25,000 people have been killed in the territory since the war began in October according to Gazan health authorities, a toll that does not distinguish between fighters and civilians.

The Israeli military said Saturday that troops were sweeping through Khan Younis, the largest city in southern Gaza and which Israel has called a Hamas stronghold, and that it had killed “numerous terrorists in various encounters.” It came the day after the International Court of Justice ordered Israel to ensure more aid and prevent genocide in the enclave but declined to call for an end to its campaign.

The continued fighting and the cold have exacerbated the plight of the hundreds of thousands of Gazans who have been on the move and for whom finding safety has been elusive. Israel has ordered civilians sheltering in several densely packed neighborhoods of Khan Younis to flee, and the fighting has reached the vicinity of at least two hospitals — Nasser Hospital, a major medical complex, and the Al-Amal Hospital, run by the Palestinian Red Crescent.

On Saturday, Israeli troops bombarded the area near Al-Amal for a sixth consecutive day, the Red Crescent said. Some 7,000 displaced Palestinians are sheltering at the hospital, Nebal Farsakh, a spokeswoman for the Red Crescent, said.

U.N. officials are particularly worried about how they will fund the 150 UNRWA shelters housing roughly 1.2 million displaced Gazans, the official said, as well as UNRWA’s ability to distribute aid. UNRWA is the lead group coordinating the aid trucks that enter Gaza every way with humanitarian aid.

UNRWA has consistently stressed its neutrality, sometimes criticizing Hamas and calling out militants for using its facilities to store weapons.

In 2021, UNRWA reassigned its Gaza director, Matthias Schmale, after he was perceived to have complimented the “huge sophistication” of Israeli strikes on Gaza during a brief war that year. Late last year, the group accused Hamas of having “removed fuel and medical equipment from the agency’s compound in Gaza City,” before later removing the posts following a backlash.

In 2005, the UNRWA chief at the time, Peter Hansen, said it was likely that UNRWA staff included Hamas members and supporters, given the scale of support for Hamas within the wider Gazan population, but said they worked according to U.N. values while on the job.

Still, experts say that beneath these tensions, some Israeli security officials privately accept the benefits of UNRWA’s existence.

“The view of the Israeli security establishment has long been that UNRWA is ultimately preferable to what they think the alternative might be without it,” said Anne Irfan, the author of a book about UNRWA and Palestinian refugees. “It provides services that otherwise under international law would really come under the remit of the occupying power.

Thomas Fuller, Victoria Kimand Gaya Gupta contributed reporting.