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Australia will resume funding to the United Nations aid agency for Palestinians, UNRWA, Foreign Minister Penny Wong has announced.
In January, the federal government joined several western nations in freezing funding to the organisation after Israeli intelligence suggested a dozen of its workers had been linked to the October 7 terror attack by Hamas.
UNRWA terminated the contracts of some of its staff and launched an investigation in response, but governments said they would wait until they were confident funds would not support terror activities before returning them.
The agency warned it was at risk of total collapse, which would leave Palestinians without one of the primary agencies distributing food and supplies and finding shelter within the city.
Senator Wong said the government was finalising an updated agreement with UNRWA and would resume $6 million in additional funding that had been suspended.
"The nature of these allegations warranted an immediate and appropriate response. The best available current advice from agencies and the Australian government lawyers is that UNRWA is not a terrorist organisation, and that existing additional safeguards sufficiently protect Australian taxpayer funding," Senator Wong said.
Senator Wong said Israel had provided "some" information to Australia, and that she had been advised based on that information that funding could be resumed.
"I don't know what I don't know. What I do know is this, I know there's people starving in Gaza ... I know that UNRWA is critical to providing this assistance to people who are on the brink of starving."
Canada and the European Union this month said they would also resume funding to UNRWA, but its largest donor the United States has maintained a payment freeze.
Opposition Leader Peter Dutton has repeatedly warned the government not to resume funding unless it could be certain it did not provide aid to an "organisation that has been linked to a listed terrorist organisation".
While Mr Dutton has argued the links were indisputable, there have been several reports by foreign media casting doubt on the veracity of Israel's claims.
The ABC has not seen the Israeli intelligence dossier relied upon to pull funding for UNRWA.
In a statement, the Executive Council of Australian Jewry said the government's decision was "wrong" and it should find another way to feed people in Gaza.
"It remains our view that delivering aid through UNRWA poses an insurmountable risk of Australian taxpayers' money being wasted or, worse still, being used in part to support Hamas's terrorist activities," the group said.
The opposition foreign affairs spokesman Simon Birmingham said the government shouldn't be restoring funding before all investigations are complete and should stay in step with the United States.
"If UNRWA funding from Australia was to be restored, it should done only in concert with a key partner like the United States, who have the weight and influence to ensure conditions are applied and verification processes in place," the senator said.
The foreign minister also announced the government would assist Jordan and the United Arab Emirates to deliver aid by providing additional parachutes for use in aid drops.
The government will also pay an additional $4 million for UNICEF to provide services for women and children in Gaza, and $2 million to the UN's new humanitarian and reconstruction coordinator for Gaza.
Those additional measures would bring Australia's total support to Gaza to $52.5 million since the outbreak of conflict in the region.