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Britain's new Labour government said on Friday it would resume funding to the UN Palestinian refugee agency UNRWA and called on Israel to allow more aid to enter Gaza.

Britain was one of several countries to halt their funding to the UN Relief and Works Agency (UNRWA) following accusations by Israel that some agency staff were involved in the Oct. 7 Hamas attack on Israel.

British foreign minister David Lammy told parliament he was reassured that the agency, which provides education, health and aid to millions of Palestinians, had taken steps to "ensure it meets the highest standards of neutrality" and the government would now provide 21 million pounds ($27.1 million) in new funding.

Lammy said malnutrition in Gaza was now so severe that mothers could not produce breast milk for their children and the rates of diarrhoea were 40 times their normal rates and polio had been detected.

"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," he said.

"UNRWA is absolutely central to these efforts. No other agency can deliver aid at the scale needed."

Other countries including Japan, Germany, Italy, Australia and Canada have resumed funding to the agency.

Israel accuses UNRWA of complicity with Hamas, saying the group was embedded within the UN agency's infrastructure.

A review, led by former French foreign minister Catherine Colonna, published in April said Israel had not provided evidence for its accusations that hundreds of are members of militant groups.

In February, Britain's then-foreign minister David Cameron said he wanted an "absolute guarantee" that UNRWA would not employ staff who were willing to attack Israel.

Cameron was replaced by Lammy as foreign minister following the Labour Party's July 4 election win.