Israel faced an international backlash on Tuesday after its parliament approved a bill banning the main United Nations aid agency for the devastated Gaza Strip.

Despite global concerns, including from Israel's ally the United States, lawmakers overwhelmingly voted to ban the UN agency for Palestinian refugees (UNRWA) from working in Israel and annexed east Jerusalem.

UNRWA has been operating in the Palestinian territories for more than seven decades, and is the largest aid provider in Gaza.

Israel controls all humanitarian aid shipments to Gaza, where its forces have been fighting Palestinian militant group Hamas for more than a year. It is unclear how the agency will continue to operate there, and aid groups have warned that there is no immediate replacement for UNRWA.

The lawmakers also passed a measure prohibiting Israeli officials from working with UNRWA and its employees.

Israel says UNRWA has been infiltrated by Hamas and that the militant group siphons off aid and uses UN facilities to shield its activities, allegations denied by the UN agency.

"There is a deep connection between the terrorist organisation (Hamas) and UNRWA, and Israel cannot put up with it," lawmaker Yuli Edelstein said in parliament as he presented the proposal.

Several of Israel's Western allies voiced disquiet at the ban, with Prime Minister Keir Starmer saying Britain was "gravely concerned."

Germany, which has been a staunch defender of Israel's security, warned it would "effectively make UNRWA's work in Gaza, the West Bank and east Jerusalem impossible... jeopardising vital humanitarian aid for millions of people."

James Elder, a spokesperson for the UN children's agency UNICEF, said the suspension of UNRWA's work “would likely see the collapse of the humanitarian system in Gaza".

He said UNICEF “would become effectively unable to distribute lifesaving supplies" such as vaccines, winter clothes, hygiene kits, health kits, water, and ready-to-use therapeutic food to combat malnutrition.

UN chief Antonio Guterres said the Israeli law could have "devastating consequences" if implemented, while UNRWA chief Philippe Lazzarini warned that the vote "sets a dangerous precedent."

Prime Minister Benjamin Netanyahu said on social media that Israel was "ready" to continue providing aid to Gaza "in a way that does not threaten Israel's security."

The ban comes as fighting rages in Gaza and Lebanon, where a second full-scale front opened last month.

The war in Gaza began when Hamas-led militants stormed into Israel on October 7, 2023, killing some 1,200 people, mostly civilians, and abducting around 250. Some 100 hostages are still inside Gaza, a third of whom are believed to be dead.

Israel's retaliatory offensive has killed over 43,000 Palestinians, according to local health authorities. Around 90 percent of the population of 2.3 million have been displaced from their homes, often multiple times. (AP/AFP)