Israel vowed Saturday to stop the UN agency at the heart of humanitarian efforts in Gaza from operating after the war, following the sacking of staff accused of involvement in the October 7 attack.

The UN agency for Palestinian refugees, UNRWA, said Friday it had fired several employees over Israel's accusations, promising a thorough investigation into the claims, which were not specified.

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

"In Gaza's rebuilding, UNRWA must be replaced with agencies dedicated to genuine peace and development," Israeli Foreign Minister Israel Katz said in a statement, urging more donors to suspend funding.

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

Relations between Israel and UNRWA, which have been strained for years, deteriorated further in recent days, with the UN agency condemning tank shelling it said had hit a shelter for displaced people in Gaza's main southern city of Khan Yunis.

The agency said tens of thousands of displaced people had been registered at the shelter and Wednesday's tank shelling killed 13 people.

Asked about the incident, the Israeli army said "a thorough review of the operations of the forces in the vicinity is underway", adding it was examining the possibility that the strike was a "result of Hamas fire".

UNRWA head Philippe Lazzarini slammed Wednesday's bombardment as a "blatant disregard of basic rules of war", with the compound clearly marked as a UN facility and its coordinates shared with Israeli authorities.

The Israeli army is the only force known to have tanks operating in the Gaza Strip.

'Vital role'

The war in Gaza was sparked by Hamas's unprecedented October 7 attacks that resulted in about 1,140 deaths in Israel, mostly civilians, according to an AFP tally of official Israeli figures.

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

Israel has vowed to crush Hamas and Gaza's health ministry says the Israeli military offensive has killed at least 26,257 people, about 70 percent of them women and children.

Before fighting broke out, UNRWA struggled to meet funding requirements.

The agency's chronic budget shortfalls worsened dramatically in 2018 when former US president Donald Trump cut support to the agency.

But US President Joe Biden's administration has fully restored support, providing $340 million in 2022, making it the agency's largest bilateral donor.

The US State Department said Friday it had "temporarily paused additional funding" to the agency while it reviewed the claims as well as the UN's plan to address concerns.

Top EU diplomat Josep Borrell praised the agency Friday for "playing a vital role over many years supporting vulnerable Palestinian refugees".

But he said the bloc expected "full transparency on the allegations" as well as "immediate measures against staff involved".

The Palestinian Authority, based in the occupied West Bank, urged donors to reverse their suspension, calling on Saturday for "maximum support for this international organisation and not stopping support and assistance to it".

UNRWA had not reacted on Saturday to the announcement of the suspension of funds.

Johann Soufi, a lawyer and former director of UNRWA's legal office in Gaza, told AFP the agency had "always had a zero-tolerance policy for violence and incitement to hatred".

"Sanctioning UNRWA, which is barely keeping the entire population of Gaza alive, for the alleged responsibility of a few employees, is tantamount to collectively punishing the Gazan population, which is living in catastrophic humanitarian conditions," he said.

The accusations against UNRWA staff came hours after the UN's top court ordered Israel to do everything it can to prevent any acts of genocide in Gaza.

The International Court of Justice on Friday handed down its first judgement in a landmark case brought by South Africa.

Soufi said the timing of the allegations against UNRWA "raises questions".