In a significant move, Australia has decided to reinstate funding to the United Nations Relief and Works Agency for Palestine Refugees (UNRWA), marking a reversal weeks after the agency faced a financial crisis. The decision comes amidst mounting concerns over the humanitarian situation in Gaza, with Foreign Minister Penny Wong expressing dismay at the deteriorating conditions in the enclave.

Australia's decision to restore funding follows similar actions taken by Sweden, the European Commission, and Canada, who also reinstated support for UNRWA after freezing funding amid Israeli allegations. These allegations surfaced following the Oct. 7 attack, with Israel accusing some of UNRWA's Gaza-based staff of involvement in the incident.

Addressing reporters in Adelaide on Friday, Foreign Minister Wong emphasized that UNRWA is not classified as a terrorist organization, according to the current advice from agencies and Australian government lawyers. Wong highlighted the shared objective of rebuilding confidence in UNRWA's operations and ensuring aid flows to Gazans in desperate need.

The freeze in funding, initiated by Australia alongside 15 international partners in January, had left UNRWA on the brink of financial collapse. The agency, which employs around 13,000 people in Gaza and is a vital supplier of essential resources like food, water, and shelter, faced significant challenges due to the funding suspension. Despite the decision to restore funding, a small number of UNRWA staff members were terminated following the accusations made by Israel, which claimed that 450 UNRWA employees were affiliated with militant groups in Gaza, although no evidence has been provided to substantiate these claims.