The Government will overturn the suspension of UK funding to the United Nations Relief and Works Agency for Palestine (UNRWA), Foreign Secretary David Lammy has said.

Mr Lammy also said Israel is in “a tough neighbourhood” and civilians in Gaza are “trapped in hell on earth” as he vowed to advance the “cause of peace” in the region.

The move comes as the UN’s top court deemed Israel’s presence in the Palestinian occupied territories unlawful.

The Foreign Office paused any future funding for UNRWA in January due to allegations that staff from the aid organisation had been involved in the October 7 Hamas attack which began the latest outbreak of violence in the Middle East.

In the nine months since, Israel has killed more than 38,600 people in the region, according to the Gazan health ministry.

The war has created a humanitarian catastrophe in the coastal Palestinian territory, displaced most of its 2.3 million population and triggered widespread hunger.

UNRWA, which is the only UN agency dedicated to helping refugees from a specific region or conflict, faced allegations that 12 of its staff were involved in the October 7 attack on southern Israel that killed 1,200 people.

Catherine Colonna, the French former foreign affairs minister, led an independent review group to assess whether UNRWA was “doing everything within its power to ensure neutrality”.

The review found that UNRWA had “a significant number of mechanisms and procedures to ensure compliance with the humanitarian principle of neutrality”, adding that it “probably” has “a more developed system than other UN organisations and agencies”.

The report added that “there is always room for improvement and issues related to neutrality persist”.

On Friday, Mr Lammy told MPs that the Government would recommit the UK’s funding to the aid organisation.

People take part in a pro-Palestine march in central London organised by the Palestine Solidarity Campaign
People have shown solidarity with the Palestinian people in the UK (Tejas Sandhu/PA)

He told the Commons: “Humanitarian aid is a moral necessity in the face of such a catastrophe and it is aid agencies who ensure UK support reaches civilians on the ground. UNRWA is absolutely central to these efforts.

“No other agency can deliver aid at the scale needed. It’s already feeding over half of Gaza’s population. It will be vital for future reconstruction and it provides critical services to Palestinian refugees in the region.

“I was appalled by the allegations that UNRWA staff were involved in 7 October attacks. But the UN took these allegations seriously. I’ve spoken to UN secretary-general (Antonio) Guterres and commissioner (Philippe) Lazzarini.

“We are reassured that after Catherine Colonna’s independent review UNRWA is ensuring they meet the highest standards of neutrality and strengthening its procedures including on vetting.

“UNRWA has acted, partners like Japan, the European Union and Norway have also now acted, this Government will act too.

“I can confirm to the House that we are overturning the suspension of UNRWA funding.

“Britain will provide £21 million in new funds, some directed at supporting the management reforms recommended by the Colonna review and UNRWA supports more than five and a half million Palestinians; almost 200 of their staff have died through this conflict.

Fabian Society conference
Foreign Secretary David Lammy hailed the work of the agency (Maja Smiejkowska/PA)

“I thank them for this life-saving work.”

The International Court of Justice meanwhile said in a non-binding opinion also issued Friday that Israel has abused its status as the occupying power in the West Bank and east Jerusalem by annexing territory, imposing permanent control and building settlements.

Palestinians want these areas, along with the Gaza Strip, to form an independent Palestinian state.

The ICJ ordered Israel to halt construction of settlements right away.

A Foreign Office spokesperson said: “We have received the Advisory Opinion issued by the International Court of Justice on Friday 19 July and are considering it carefully before responding. The UK respects the independence of the ICJ.”

“The Foreign Secretary was clear on his visit to Israel and the Occupied Palestinian Territories earlier this week that the UK is strongly opposed to the expansion of illegal settlements and rising settler violence.

“This government is committed to a negotiated two-State solution which can deliver a safe and secure Israel alongside a viable and sovereign Palestinian state.”

The Labour leadership has been accused by some backbenchers of being too slow to call for a ceasefire in Gaza, and Mr Lammy said he is determined to “advance the cause of peace”.

Conservative former minister Richard Holden expressed concerns over the decision to restore funding and sought an “unequivocal assurance” that Hamas has no links to UNRWA in Gaza.

Sacha Deshmukh, Amnesty International UK’s chief executive, said the suspension of funding was an “unjustifiable decision” and welcomed the announcement that it would be restored.

The Board of Deputies of British Jews said the resumed funding “needs to come alongside significantly increased oversight of UNRWA’s activities”, and added that the organisation should not be distinct from the UNHCR, the aid organisation for other refugee populations.