Germany will restore funding to the United Nations’ refugee agency for Palestinians after an independent review found that Israel had not provided evidence that its staff belonged to terror groups.

Earlier this year, more than a dozen countries cut around $450 million of funding to the United Nations Relief and Works Agency (Unrwa) after the Israeli government claimed its employees had taken part in the October 7 attack.

A review led by former French foreign minister Catherine Colonna published this week concluded that the body needed to improve its neutrality and said there were 50 steps the body could take to comply with neutrality requirements.

Some Unrwa textbooks have been found to contain “problematic” information while staff have expressed opinions, it concluded. 

The body faces greater neutrality issues than other aid groups, the report added, “due to the magnitude of its operations, with most personnel being locally recruited and recipients of Unrwa services.”

The document did not examine whether Unrwa workers took part in Hamas’s October 7 attack, however, as this is the subject of a separate investigation.

In a statement, the German foreign ministry said: “In support of these reforms, the German government will soon continue its cooperation with Unrwa in Gaza, as Australia, Canada, Sweden and Japan, among others, have already done...

“Germany will coordinate closely with its closest international partners on the disbursement of further funds. Unrwa’s short-term financing needs in Gaza are currently covered by existing funds.”

Unwra has a “vital and currently irreplaceable role in providing for the people in Gaza,” they added.

Israel condemned Germany’s decision, with a spokesman for the country’s foreign ministry describing Unwra as a “rotten and poisoned tree” in a statement. 

"The transfer of German taxpayers’ money to Unrwa… will not contribute to promoting the security and well-being of the residents of the area, Israelis and Palestinians alike,” Oren Marmostein added. 

Unwra’s communications director Juliette Touma said: “We are so grateful. Germany has been a very committed donor to the agency.”

Israel had claimed that up to 12 per cent of Unrwa’s staff were affiliated with terror groups, and that at least 12 Unrwa staff had taken part in last year’s Hamas attack.

An NGO that submitted evidence to the UN’s inquiry previously expressed concern that the international body sought to “whitewash” Unrwa.

Impact-se, which monitors the content of Palestinian textbooks, previously published a report that found some Unrwa schools celebrated October 7.

CEO Marcus Sheff told the JC he feared the UN review, “would likely downplay the extent of hate taught in Unrwa schools.”

Unrwa, which was established in 1948 to provide aid to those displaced by the 1948 Arab-Israeli war, employs over 30,000 people.

The decision to halt its funding sparked concern that no other body could replace its work providing assistance to the population of Gaza. 

"We are shocked by the reckless decision to cut a lifeline for an entire population by some of the very countries that had called for aid in Gaza to be stepped up and for humanitarians to be protected while doing their job,” Oxfam said in a statement earlier this year.

Jewish community leaders welcomed the decision, however, with the Board of Deputies praising the British government’s decision to pause their support.

A spokesman said: “There have been significant worries for decades regarding the activity of Unrwa employees; their incitement of antisemitism and their promotion of terror — and for decades Unrwa’s leadership has dismissed such fears.

"It is clear that far stronger oversight of this agency is desperately needed.”