Several countries including the UK have paused funding for the UN agency for Palestinian refugees, UNRWA, APA reports.
It comes after the agency announced the sacking of several of its staff over allegations they were involved in the 7 October Hamas attacks.
The UK government said it was "appalled" by Israel's allegations.
The US, Australia, Italy, Canada, Finland, the Netherlands, Switzerland and Germany have also suspended additional funding to the UN agency.
Created in 1949, the United Nations Relief and Works Agency UNRWA, is the biggest UN agency operating in Gaza.