Palestinian aid agency can't be replaced, UN says, warning of 'collapse'

Nothing can "replace or substitute" the U.N. Palestinian refugee agency, whose staff were implicated in the Hamas attacks on Israel, the U.N.'s coordinator for Gaza aid said Tuesday even as Israel made new claims against it.

Several countries, including the United States, Britain, Germany and Japan, have suspended funding to the UNRWA agency, and the U.N. Secretary-General Antonio Guterres was holding crunch talks with donor countries.

Agency chiefs in the U.N.'s highest-level humanitarian coordination forum, including the heads of the WHO, the U.N. rights office, UNICEF and the World Food Programme, warned defunding UNRWA risked a "catastrophic" humanitarian collapse in Gaza.

"Withdrawing funds from UNRWA is perilous and would result in the collapse of the humanitarian system in Gaza, with far-reaching humanitarian and human rights consequences in the occupied Palestinian territory and across the region," said the statement from heads of organizations that form the U.N. Inter-Agency Standing Committee.

The dispute intensified Tuesday after Israel accused the UNRWA of allowing Hamas to use agency infrastructure in Gaza for military activity.

UNRWA said it has acted promptly over allegations by Israel that 12 of its staff were involved in the Hamas attacks, adding that cuts in funding will affect ordinary Palestinians.

The U.N. agency has long been under scrutiny by Israel, which accuses it of systematically going against the country's interests.

 'Fundamentally compromised' 

Israel has vowed to stop the agency's work in Gaza after the war and doubled down on Tuesday when government spokesman Eylon Levy said UNRWA "has been fundamentally compromised."

He accused it of "hiring terrorists...