A string of countries including the United States, Germany and Britain have paused their funding to the aid agency in the wake of allegations that some UNRWA staff were involved in Hamas' Oct. 7 attacks in southern Israel.

"The agency remains the largest aid organization in one of the most severe and complex humanitarian crises in the world," UNRWA Commissioner-General Philippe Lazzarini said in a statement.

"If the funding remains suspended, we will most likely be forced to shut down our operations by end of February not only in Gaza but also across the region."

The Israeli offensive launched in the wake of the attacks, in which some 1,200 people were killed and 253 taken hostage, has displaced most of Gaza's population, left many homes and civilian infrastructure in ruins, and caused acute shortages of food, water and medicine.

Aid groups and other U.N. agencies have urged donors to keep supporting UNRWA, with the head of the World Health Organization (WHO) warning on Wednesday that defunding would have "catastrophic consequences" for the people of Gaza.

Israeli authorities have long called for the agency to be dismantled, arguing that its mission is obsolete and fosters anti-Israeli sentiment, something UNRWA has vigorously denied.

On Wednesday, Israeli Prime Minister Benjamin Netanyahu reiterated his call to terminate UNRWA's mandate and to replace it with other U.N. or non-U.N. aid agencies.

UNRWA, formally the United Nations Relief and Works Agency for Palestine Refugees in the Near East, was established in 1949 by the U.N. General Assembly after the war surrounding the founding of Israel as a Jewish state, when 700,000 Palestinians fled or were driven from their homes.

It employs 30,000 Palestinians to serve the civic and humanitarian needs of 5.9 million descendants of those refugees - in the Gaza Strip, in the West Bank and in vast camps in neighbouring Arab countries.