BERLIN (Reuters) -Germany said on Wednesday it would resume cooperation with the U.N. agency for Palestinian refugees (UNRWA), signalling a resumption of funding that was frozen after Israel accused 12 UNRWA staff of participating in the Hamas-led Oct. 7 attack.
The allegations prompted 16 donor states, including the biggest, the United States, to freeze some $450 million of funds, a blow to UNRWA's operations as it grapples with the humanitarian crisis unleashed by Israel's assault on Gaza.
A review led by former French foreign minister Catherine Colonna into UNRWA's procedures for ensuring adherence to principles of neutrality was published on Monday.
In a statement, the German foreign and development ministries urged UNRWA to swiftly implement the report's recommendations, including strengthening its internal audit function and improving external oversight of project management.
"In support of these reforms, the German government will soon continue its cooperation with UNRWA in Gaza, as Australia, Canada, Sweden and Japan, among others, have already done," it said. Germany is UNRWA's second-biggest donor.
The agency employs 32,000 people in the Palestinian territories and nearby countries, including 13,000 in the Gaza Strip, where it is by far the biggest aid agency, running schools and social services for the refugees who make up the majority of Gazans.
UNRWA communications director Juliette Touma said UNRWA was "so grateful", adding: "Germany has been a very committed donor to the agency."
The review said Israel had yet to provide evidence to support accusations made on the basis of an UNRWA staff list given to it in March that a significant number of UNRWA staff were members of what it called Gaza terrorist groups.
The review found that UNRWA had "a more developed approach" to neutrality than other similar U.N. or aid groups, although "neutrality-related issues persist" such as staff publicly expressing political views.
The United Nations is investigating the accusations against the 12 employees. After these surfaced in January, UNRWA said it had sacked 10 of those named, and that the other two were dead.
Israel stepped up its accusations in March, saying that more than 450 UNRWA employees were fighters in what it termed terrorist groups in Gaza.
Israel's Foreign Ministry spokesperson called Germany's decision "regrettable and disappointing". He said Israel had shared detailed information about "many hundreds" of UNRWA employees who were members of Hamas, the Islamist movement that runs Gaza, and another group, Islamic Jihad.
Accepting the recommendations of the review on Monday, U.N. Secretary-General Antonio Guterres urged all countries to support UNRWA as a "lifeline for Palestine refugees in the region".
UNRWA chief Philippe Lazzarini said on Tuesday that UNRWA currently has enough funding to pay for operations until June.
(Reporting by Andreas RinkeWriting by Andrey Sychev and Tom Perry;Editing by Miranda Murray, Rachel More, Peter Graff, Alexandra Hudson and Kevin Liffey)
