A truck, marked with the UNRWA logo, crosses into Egypt from Gaza. Reuters

The UN agency for Palestinian refugees was under pressure after staff members were accused of participating in the October 7 attacks, while fighting in Gaza sent more people fleeing south towards the Egyptian border.

Israeli Foreign Minister Israel Katz called for Philippe Lazzarini, the head of the UN agency for Palestinian refugees, UNRWA, to quit over the deepening row and several countries suspended funding.

The agency said on Friday it had fired several employees over Israel's unspecified accusations and promised a thorough investigation.

"Mr Lazzarini please resign," Katz said on social media platform X late on Saturday in response to a post by the UNRWA chief warning that the funding cuts meant the agency's operation in Gaza was close to collapse.

Katz said earlier that UNRWA "must be replaced with agencies dedicated to genuine peace and development" in the rebuilding of Gaza after the territory's bloodiest war.

Commissioner general of UNRWA Philippe Lazzarini speaks during a conference for civilians in Gaza. File/AFP

Donors including Germany, Britain, Italy, Australia and Finland on Saturday followed the lead of the United States, which said it had suspended additional funding to the agency over the accusations.

Hamas slammed Israeli "threats" against UNRWA on Saturday, urging the United Nations and other international organisations not to "cave in to the threats and blackmail".

The Islamist group's October 7 attack resulted in about 1,140 deaths in Israel, mostly civilians, according to an AFP tally of official figures.

Palestinian group Hamas also seized about 250 hostages and Israel says around 132 of them remain in Gaza, including the bodies of at least 28 dead captives.

The Israeli military offensive, which began in late October, has killed at least 26,257 people, most of them women and children, according to Hamas-ruled Gaza's health ministry.

Agence France-Presse