New Zealand on Tuesday joined the list of countries that have suspended funding to the embattled UN Palestinian refugee agency following Israeli allegations that some staff participated in the 7 October Hamas attack. 

Prime Minister Christopher Luxon said New Zealand had paused funding to the United Nations Relief and Works Agency for Palestine Refugees until the allegations are investigated.

The agency has fired several staff members over Israel's accusations and promised a thorough investigation into the claims, which were not specified. Israel has vowed to stop the agency's work in Gaza after the war.

"The allegations are incredibly serious. It's important they are properly understood and investigated," Luxon told reporters.

New Zealand will not "be making any further contributions" to UNRWA until foreign minister Winston Peters "says it's good to do so", Luxon added.

The United States, Australia, the United Kingdom, Japan and Germany are among the other countries to have already suspended funding to UNRWA, which has been at the heart of humanitarian efforts in Gaza.

Luxon said New Zealand had been providing UNRWA with about NZ$1 million (US$613,260) in yearly funding.

The European Union on Monday demanded an "urgent" audit of the UN Palestinian refugee agency and is also reviewing funding.