The decision to halt the money came following unproven allegations by Israel that 12 of the group’s 30,000 employees took part in the Hamas-led attack on Israel on 7 October last year.
On Friday, UNRWA confirmed it had severed ties with the employees and launched an investigation.
“The Israeli authorities have provided UNRWA with information about the alleged involvement of several employees in the horrific attacks on Israel on October 7,” Philippe Lazzarini, commissioner-general of UNRWA, said on Friday.
“To protect the agency’s ability to deliver humanitarian assistance, 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.”
Shortly after the announcement, Washington announced it would suspend funding to the agency until the allegations were addressed.
Australia, Canada, Italy, Finland, the UK, Switzerland and the Netherlands followed suit, but Norway, Spain and Ireland announced they would continue funding the agency.
The move was condemned by the Palestinian Authority’s civilian affairs minister, Hussein al-Sheikh.
“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” Sheikh wrote on X.