The decision to suspend aid to the UN Palestinian refugee agency by several Western countries is a “collective punishment”, the head of the UN Relief and Works Agency (UNRWA) has said, as the UN chief Antonio Guterres joined him in urging donor nations to maintain much-needed Gaza aid.

UNRWA chief Philippe Lazzarini said he was shocked such decisions were taken as “famine looms” in Gaza, which has been devastated by nearly four months of relentless Israeli bombardment that has killed more than 26,000 people.

The agency, with its 13,000 employees in Gaza, is the main organisation aiding Gaza’s population amid the humanitarian disaster. More than two million of the besieged enclave’s 2.3 million people depend on the UNRWA for “sheer survival”, including food and shelter, Lazzarini said, warning this lifeline can “collapse any time now”.

UN Secretary-General Antonio Guterres also joined Lazzarini’s call on Sunday, pleading for donor states to continue supporting the UN agency that runs aid operations in Gaza. “The dire needs of the desperate populations they serve must be met.”

Guterres said that the UN employees involved in acts of “terror” will be held accountable but added that “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”.

About 1,100 people, mostly civilians, were killed in the wake of the Hamas attack and about 240 captives were taken.

Nine UNRWA staff terminated

Nine out of 12 UNRWA staff members accused of involvement in the October 7 Hamas attack inside Israel have been terminated, according to the UN chief. One was confirmed dead and the identities of the other two were being clarified, he said.

“The Secretariat is ready to cooperate with a competent authority able to prosecute the individuals in line with the Secretariat’s normal procedures for such cooperation.”

The UN on Friday said it was investigating several agency employees over the allegations.

But Israel has continued to attack the UN agency, with Foreign Minister Israel Katz calling for Lazzarini’s resignation on Saturday.

Top Palestinian officials and Hamas have criticised the decision which they said “entails great political and humanitarian relief risks”.

“At this particular time and in light of the continuing aggression against the Palestinian people, we need the maximum support for this international organization and not stopping support and assistance to it,” Palestine Liberation Organization (PLO) Secretary-General Hussein al-Sheikh wrote on X, urging the countries to “immediately reverse their decision”.

Chris Gunness, a former UNRWA spokesman, says there is a “coordinated political attack” on the UN’s agency for Palestinian refugees.

“The Israelis have said they cannot win the war on Gaza unless UNRWA is disbanded. So what clearer signal do you want?” he told Al Jazeera.

UNRWA lifesaving assistance is about to end following countries decisions to cut their funding to the Agency.

Our humanitarian operation, on which 2 million people depend as a lifeline in Gaza, is collapsing. I am shocked such decisions are taken based on alleged behavior of a…

— Philippe Lazzarini (@UNLazzarini) January 27, 2024

Western countries suspend aid

The United States, which said 12 agency employees were under investigation, immediately suspended funding, followed by several other countries, including Britain, Germany, Canada, Australia, the Netherlands, Finland, Switzerland and Italy.

On Sunday, the French foreign ministry announced that Paris has not planned any new payments to support UNRWA for the first quarter of this year and will decide when the time comes what action to take in conjunction with the UN and its other main donors.

European Union foreign policy chief Josep Borrell highlighted that the 27-member bloc would “assess further steps and draw lessons based on the result of the full and comprehensive investigation”.

“While I understand their concerns – I was myself horrified by these accusations – I strongly appeal to the governments that have suspended their contributions to, at least, guarantee the continuity of UNRWA’s operations,” Guterres said.

Meanwhile, there are reports that 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 captives. Al Jazeera could not independently verify the reports.

CIA director Bill Burns is expected to meet with Israel’s Mossad intelligence agency David Barnea, Qatari Prime Minister Mohammed bin Abdulrahman Al Thani and Egyptian intelligence chief Abbas Kamel in France on Sunday for talks centred on the captive negotiations.

Over 2 million people in #Gaza depend on @UNRWA for survival as war and displacement continue.

Many are hungry as the clock is ticking towards a looming famine. @UNRWA runs shelters for over 1 million people & provides food & primary healthcare even at the height of hostilities. https://t.co/lPEdNQtq8H

— UNRWA (@UNRWA) January 27, 2024

Dire situation

The humanitarian situation is dire in Gaza, after Israeli attacks destroyed vast swaths of the Palestinian enclave and displaced nearly 85 percent of the territory’s people.

Rare health institutions function in the enclave with low capacity and the UNRWA establishments, mostly schools, have been widely used as shelters by displaced people.

Gunness, the former UNRWA chief, said the UN agency only has weeks before it runs out of money for its crucial aid work to save Palestinian lives in Gaza.

“My message to the Arab world, particularly to the Gulf, is where are you? Because they’re making billions each day on oil revenues. A tiny fraction of those oil revenues would see UNRWA’s financial problems disappear overnight. This unconscionable gap inflicted by these Western countries would be filled very quickly,” Gunness told Al Jazeera.

“Some of the most desperate people in the Middle East are now facing starvation, they’re facing famine, and the Arab states need to step up to the plate.”

Meanwhile, Israel has continued to pound the central and southern parts of Khan Younis, with Gaza’s Ministry of Health reporting the killing of 174 Palestinians in the past 24 hours.

Nasser Hospital, the biggest healthcare facility in southern Gaza, has been under Israeli siege for the past five days and is on the brink of collapse. Doctors at the hospital are warning it will not be able to function for much longer due to a lack of supplies.