In short:

Israel's Knesset has passed laws that prohibit UNRWA from operating on Israeli soil and strip its staff of their legal immunities.

Prime Minister Benjamin Netanyahu said UNRWA workers must be held accountable for what he called "terrorist activities" against Israel.

UNRWA commissioner-general Philippe Lazzarini said the move put "an entire generation of children at risk".

Israel's parliament has passed legislation targeting the main UN agency providing aid to people in Gaza.

The new laws ban the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) from operating on Israeli soil.

Two bills passed in the Knesset prohibit ties between Israeli officials and the agency, and strip its staff of their legal immunities.

They ban UNRWA from conducting "any activity" or providing any service inside Israel.

The legislation, which would not take effect immediately, risks collapsing the fragile aid distribution process at a moment when the humanitarian crisis in Gaza is worsening and Israel is under increased US pressure to ramp up aid.

The vote passed 92-10 and followed a fiery debate between supporters of the law and its opponents, mostly members of Arab parliamentary parties.

Israeli Prime Minister Benjamin Netanyahu said UNRWA workers must be held accountable for what he called "terrorist activities" against the country.

"UNRWA workers involved in terrorist activities against Israel must be held accountable," he said, adding that the legislation would take effect in 90 days.

"Since avoiding a humanitarian crisis is also essential, sustained humanitarian aid must remain available in Gaza now and in the future."

'Nothing less than collective punishment'

UNRWA commissioner-general Philippe Lazzarini said the move set a "dangerous new precedent".

"These bills will only deepen the suffering of Palestinians, especially in Gaza where people have been going through more than a year of sheer hell," he wrote on X.

"It ⁠will deprive over 650,000 girls and boys there from education, putting at risk an entire generation of children."

He called the bills "nothing less than collective punishment".

The UN Secretary-General Antonios Guterres has echoed that sentiment in a statement which said any law banning UNRWA from operating in Israel "could have devastating consequences for Palestine refugees in the Occupied Palestinian Territory, which is unacceptable".

"There is no alternative to UNRWA.

"The implementation of these laws would be detrimental for the resolution of the Israeli-Palestinian conflict and for peace and security in the region as a whole.

"UNRWA is indispensable."

Mr Guterres said he would look to bring the matter to the attention of the 193 members in the UN General Assembly for further consideration.

According to UNRWA, it has supplied aid to Gaza via Israeli border crossings at Kerem Shalom, in the south, Erez and Western Erez in the north, Gate 96 in the east and via the sea at JLOTS, a short-lived port in Gaza's north.

In May, the IDF took control of the Rafah border crossing with Egypt, closing the flow of aid through the checkpoint.

Foreign Minister Penny Wong said Australia was among a group of nations that had urged Israel not to pass the legislation.

"UNRWA does life-saving work," she said on X.

Israel accuses UNRWA of ties to Hamas

Israel has accused UNRWA of maintaining strong ties with Hamas.

In August, UNRWA finalised an investigation into allegations of ties between agency staff and the October 7 attacks on Israel.

It found nine staff members may have been involved in the attacks and sacked them.

Another 10 staff members were investigated, with no evidence found in one case and insufficient evidence found in the others.

The changes would also be a serious blow to the agency and to Palestinians in Gaza who have become reliant upon it for aid throughout more than a year of devastating war.

The bills risk crippling the flow of humanitarian aid into Gaza.

More than 1.9 million Palestinians are displaced from their homes and Gaza faces widespread shortages of food, water and medicine.

Israel has alleged that some of UNRWA's thousands of staff members participated in the October 7, 2023, Hamas attacks that sparked the war in Gaza.

The attack left about 1,200 people dead, with about 250 hostages taken back to Gaza.

In retaliation, Israel's invasion of Gaza has killed more than 42,000 people, according to local health authorities.

The Australian government considers Hamas to be a terrorist organisation.

UNICEF says more children will die without UN aid

A spokesman for United Nations International Children's Emergency Fund (UNICEF) said other agencies would not be able to fill the void left by UNRWA, whose banning marked "catastrophe upon catastrophe" for the people of Gaza.

"They are the organisation that is able to go north to south to east to west," James Elder told ABC News Breakfast.

"UNRWA has the size and scope and no agency can go with that.

"If you take away the backbone of whatever is left of that aid supply, as we've said for a long time, you guarantee that more children are being killed.

"I'm sorry for the lack of diplomacy in my language, but I think that we've moved past the idea of sugarcoating this."

US has 'deep concern' over ban

US State Department spokesperson Matthew Miller said UNRWA played an "irreplaceable role right now in Gaza" and that the US had raised concerns with the Israeli government.

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