The heads of multiple UN bodies have made a joint warning that cutting off funding to the UN's Palestinian refugee agency (UNRWA) will have "catastrophic consequences" for Gaza.

"Withdrawing funds from UNRWA is perilous and would result in the collapse of the humanitarian system in Gaza, with far-reaching humanitarian and human rights consequences in the occupied Palestinian territory and across the region," said the statement from heads of organizations that form the UN Inter-Agency Standing Committee.

"As the Secretary-General has said, any UN employee involved in acts of terror will be held accountable. However, we must not prevent an entire organization from delivering on its mandate to serve people in desperate need," the statement added.

Several key UNRWA donors, including the United States, Germany, and Japan, halted funding to the agency following allegations from Israel that some staff played a role in the October 7 Hamas terror attacks.

The UNRWA said it acted promptly over the Israel allegations, immediately sacking several of its staff and launching an investigation and review. 

The joint statement urged nations to reconsider the suspension of funding, saying that no other agency was equipped to provide Gaza with the scale of aid that UNRWA did.

UNRWA has some 13,000 staff and is the primary humanitarian agency in Gaza.