Palestine's envoy in Australia has branded a move to pause aid for Gaza as collective punishment after allegations workers at a United Nations agency were part of Hamas' attack against Israel.
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Izzat Abdulhadi is calling for Foreign Minister Penny Wong to reinstate the funding to the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA).
"It's very disappointing and it will impact a lot of lives in the Gaza Strip," he told AAP.
"It increases starvation, it will increase the suffering of the Palestinian people in Gaza - it's a double standard from the international community.
"It's the collective punishment of 5.6 million Palestinian refugees."
That 12 people are being investigated within an agency of 30,000 people shouldn't mean vital aid is paused to millions, Mr Abdulhadi said.
"It's a UN organisation, it has a lot of scrutiny and budget monitoring, it's propaganda to liquidate the UNRWA.
"Naturally this position will increase anger and radicalisation within the Arab Muslim community within Australia."
Prime Minister Anthony Albanese said his government wanted funding to resume but called the allegations a "real concern".
"We want to make sure protections are put in place to ensure the money Australia is giving goes to the right purpose," he told Triple J on Monday.
Asked whether he still supported the Palestinian liberation movement, Mr Albanese pointed to the government's backing of a humanitarian ceasefire and a two-state solution, and its move to stop recognising West Jerusalem as Israel's capital.
He said Australia's response to the UNRWA allegations reflected those of like-minded nations including Canada, the UK and the US.
But notably, New Zealand hasn't immediately frozen aid, with its foreign affairs ministry saying it had confidence in the UN to investigate and it expected "findings will be met with an appropriate response".
It would re-assess the situation again before releasing its next round of funding for the agency in 2024, the ministry said.
The International Court of Justice (ICJ) delivered an interim ruling on Friday that Israel needed to take measures to prevent genocide but didn't order a ceasefire in the besieged enclave.
Australia respected the court's independence and international law needed to be upheld, a spokesperson for the foreign minister said in response to the ruling.
Minister Anne Aly welcomed the ICJ's ruling, saying it was in line with Australia's position "to really stress and put pressure on Israel to ensure it abides by international rules of law".
"It's difficult to see the images coming out of Gaza and Palestine and not feel concern and not feel empathy and not feel that something needs to be done," she told ABC Radio.
She also called for aid to be frozen for as short a time as possible, branding the UNRWA "one of the most vital services for people in Gaza and in the West Bank".
"These are fairly serious allegations," she said.
"I hope those investigations are swift and we can restore the funding as soon as those investigations are done."
Australia's opposition has expressed support for the government's decision to freeze funds, with foreign affairs spokesman Simon Birmingham saying concerns about UNWRA went beyond these allegations.
They include teaching resources that "potentially promoted extremist ideology and in doing so, exacerbated problems and tensions that lead to the rise of Hamas", he said.
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