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The UN agency for Palestinian refugees said on Friday that it had fired “several” employees after receiving information from Israel about their alleged involvement in Hamas’s October 7 attack.

The US responded to the development, which came the same day as a high-profile case against Israel in the UN’s top court, by halting funding to UNRWA, the main body providing aid to Palestinians in Gaza, the West Bank and other countries.

Philippe Lazzarini, UNRWA head, said the contracts of the employees had been immediately terminated and that he had ordered “an investigation in order to establish the truth without delay”.

“Any UNRWA employee who was involved in acts of terror will be held accountable, including through criminal prosecution,” Lazzarini said.

“UNRWA reiterates its condemnation in the strongest possible terms of the abhorrent attacks of October 7 and calls for the immediate and unconditional release of all Israeli hostages and their safe return to their families,” he added.

UNRWA did not provide any details of the employees’ alleged actions. But the US said the allegations involved 12 agency employees “who may have been involved” in the October 7 attacks.

The US state department said it was “extremely troubled” by the claims and had “temporarily paused additional funding for UNRWA while we review these allegations and the steps the United Nations is taking to address them”.

John Kirby, a spokesperson for the White House’s National Security Council, said Washington wanted to see a “complete, thorough, transparent” investigation. “If in the investigation it is determined that people need to be held accountable, then obviously we want to see that too.”

Kirby added that Washington would consider “additional changes in the way we support UNRWA” depending on the outcome of the probe. 

The EU’s top diplomat, Josep Borrell, said he was “extremely concerned”, but stopped short of halting funding to the agency.

“We are in contact with UNRWA, expect it to provide full transparency on the allegations and to take immediate measures against staff involved,” he said in a statement, which also praised the agency’s “vital role” in providing aid to Palestinian refugees.

Yoav Gallant, Israel’s defence minister, said: “Major changes need to take place so that international efforts, funds and humanitarian initiatives don’t fuel Hamas terrorism and the murder of Israelis.

“Terrorism under the guise of humanitarian work is a disgrace to the UN and the principles it claims to represent.”  

UNRWA’s announcement came on the same day that the International Court of Justice, the UN’s highest court, ordered Israel to limit harm to Palestinians in Gaza in a politically explosive case brought by South Africa that alleges that Israel is committing genocide in the enclave.

At least 150 UNRWA employees, out of 13,000 in the Gaza Strip, have been killed since October 7, when Israel declared war on Hamas after the militant group carried out a cross-border raid that killed 1,200 people inside Israel. They also took about 240 hostages, of whom Israel says about 136 remain in Gaza, though about 27 of those are believed to have died.

Since then, several UNRWA schools that had been converted into shelters for displaced Palestinians have been attacked by the Israeli military, including an assault on January 24 in which the UN said tank shells hit a building housing 800 people, killing at least nine Palestinians.

The Israel Defense Forces has said that it was responding to fire from militants on those occasions.

UNRWA has been a frequent target of Israel’s criticism that the UN and other international bodies are biased towards Palestinians. Israel has called for the agency’s responsibilities to be handed over to the UN’s High Commissioner for Refugees, or UNHCR.

Israel has criticised some of the content of textbooks used in UNRWA schools and social media posts by UNRWA employees. More broadly, it argues that a specific agency to aid just Palestinians entrenches the politically sensitive status of the refugees from the 1948 war that founded the state of Israel.