The secretary-general of the United Nations has called on countries to continue funding the main agency providing aid in Gaza after several of its employees were accused of taking part in the Hamas attack on Israel that ignited the war four months ago.
The dispute engulfing the biggest provider of vital aid to Palestinians came as US officials said negotiators were closing in on a ceasefire agreement.
The emerging deal would bring a two-month halt to the deadliest-ever Israeli-Palestinian violence, which has stoked instability across the Middle East.
Antonio Guterres warned that the UN agency for Palestinian refugees, known as UNRWA, would be forced to scale back aid to more than two million Palestinians as soon as February.
The coastal enclave is in the grip of a severe humanitarian crisis, with a quarter of the population facing starvation.
“The abhorrent alleged acts of these staff members must have consequences,” Guterres said in a statement.
“But the tens of thousands of men and women who work for UNRWA, many in some of the most dangerous situations for humanitarian workers, should not be penalised.
"The dire needs of the desperate populations they serve must be met."
He said that of the 12 employees accused of taking part in the attack, nine had been immediately terminated, one was confirmed dead and “the identity of the two others is being clarified”.
He said all would be held accountable, including through criminal prosecution.
UNRWA has 13,000 staffers in Gaza, nearly all of them Palestinians, and provides basic services, from medical care to education, for Palestinians families who fled or were driven out of what is now Israel during the 1948 war surrounding its creation.
More than two million of the territory’s 2.3 million people depend on UNRWA for “sheer survival”, including food and shelter, its director Philippe Lazzarini said, warning this lifeline could “collapse any time now”.
The United States, which is the largest donor to the agency, as well as Australia and Canada suspended funding at the weekend, followed by Britain, Germany, Italy, the Netherlands, Switzerland and Finland.
The Israel-Hamas war has killed more than 26,000 Palestinians, according to local health officials, destroyed vast swathes of Gaza and displaced nearly 85 per cent of the territory’s people.
The Hamas attack in southern Israel killed about 1200 people, mostly civilians, and about 250 hostages were taken.
Two senior Biden administration officials said US negotiators were making progress on a potential agreement under which Israel would pause military operations against Hamas for two months in exchange for the release of more than 100 hostages.
The officials, who requested anonymity, said emerging terms of the deal would play out over two phases, with the remaining women, elderly and wounded hostages to be released by Hamas in a first 30-day phase.
The emerging deal also calls for Israel to allow more humanitarian aid into Gaza.
More than 100 hostages, mainly women and children, were released in November in exchange for a week-long cease-fire and the release of 240 Palestinians imprisoned by Israel.
CIA Director Bill Burns is expected to discuss the contours of the emerging agreement when he meets for talks on Sunday with the head of Israel's Mossad intelligence agency, Qatar's prime minister and Egypt's intelligence chief.
Despite the apparent progress, Israeli Prime Minister Benjamin Netanyahu reiterated in a televised news conference on Saturday that the war would continue until “complete victory”, including crushing Hamas.
The dispute over UNRWA came as the International Court of Justice ruled Friday that Israel must do its utmost to limit death and destruction in its Gaza offensive.
The top United Nations court has asked Israel for a compliance report in a month, placing added scrutiny on Israel's military.
The court's binding ruling stopped short of ordering a ceasefire, but its orders were in part a rebuke of Israel's conduct in its nearly four-month war against Gaza's Hamas rulers.
The case brought by South Africa to the UN court alleged Israel is committing genocide, which Israel vehemently denies.
A final ruling is expected to take years.
The court also ordered Israel to urgently get aid to Gaza.
AP with Reuters