The main United Nations agency in Gaza has warned it “most likely” will have to halt its work in the war-torn enclave and across the Middle East by the end of the month after donors paused funding over allegations some of its staff were involved with Hamas’ October 7 attack on Israel.

“If the funding remains suspended, we will most likely be forced to shut down our operations by the end of February – not only in Gaza, but also across the region,” the agency’s Commissioner-General Philippe Lazzarini said Thursday.

The United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) assists Palestinians in Jordan, Lebanon, Syria and the West Bank, as well as in Gaza.

The warning comes after more than a dozen countries, including the United States, announced they would withhold funding following allegations by Israel that 13 UNRWA staff had been involved in Hamas’ October 7 attack, ranging from involvement in kidnapping hostages and supplying logistic support.

Some $440 million of funding has been suspended, according to UNRWA, which has 13,000 staff in Gaza.

The agency said the severe humanitarian needs of Palestinians in Gaza would likely deteriorate further if the funding is not restored.

“Tens of thousands of people have been forced to flee to the south due to bombardment and fighting in Khan Younis over the last week, adding to more than 1.4 million people already crammed in the southern governorate of Rafah. Most are living in makeshift structures, tents, or out in the open, and now also fear they might no longer receive any food or other humanitarian assistance from UNRWA,” the agency said in a statement from Amman, Jordan.

Thomas White, director of UNRWA Affairs in Gaza, said: “Rafah has become a sea of people fleeing bombardments.” Most of those fleeing the embattled city of Khan Younis have already been displaced several times, and many have been forced to leave the largest UNRWA shelter in the Khan Younis Training Center.

While fighting rages in the south, UNRWA also warned of the situation in the north of the territory “where famine is looming,” and where “UNRWA has had very little access since the war began.”

White said UNRWA had received reports that people in the area are grinding bird feed to make flour.

“When our convoys are finally permitted to go to the area, people rush to the trucks to get food and often eat it on the spot,” he said.

Lazzarini said “it is the time to reinforce and not to weaken UNRWA,” after the International Court of Justice (ICJ) last week ordered Israel to provide more humanitarian assistance to Gaza in a politically explosive genocide case brought against Israel by South Africa.

Israeli Prime Minister Benjamin Netanyahu on Wednesday called for UNRWA to be dismantled and replaced by other aid groups.

“I think it’s time that the international community and the UN itself understand that UNRWA’s mission has to end,” Netanyahu told a delegation of UN ambassadors.

Netanyahu also addressed the ICJ’s ruling, which ordered Israel to “take all measures” to prevent genocide against Palestinians in Gaza, but stopped short of calling for Israel to suspend its military campaign in the enclave as South Africa had requested.

“The worst thing that I can say is this, that many of the charges are false and unfounded, that were leveled against us in The Hague, were brought by UNRWA officials. And we have discovered in the last few weeks that UNRWA officials were complicit in the massacre,” he said.

Other Israeli officials have called for UNRWA in its current form to be taken apart. Defense Minister Yoav Hallant told the same meeting of UN ambassadors that “UNRWA is Hamas with a facelift.”

Last week 21 humanitarian organizations said they were “shocked by the reckless decision to cut a lifeline for an entire population by some of the very countries that had called for aid in Gaza to be stepped up and for humanitarians to be protected while doing their job.”