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By Alistair Bunkall, Middle East correspondent in Jerusalem

The Israeli decision to ban the UN agency for Palestinian refugees (UNRWA) on its territory and sever diplomatic ties with it could have a devastating impact on millions of Palestinians who rely on the services provided.

Unless there is an intervention, the ban will come into force in 90 days. The vote in the Knesset – the Israeli assembly – last night will also preclude Israel from providing work permits to UNRWA staff and prevent Israeli authorities from working with the agency, thereby significantly complicating the access of aid into Gaza and the future for UNRWA schools and medical facilities in East Jerusalem and the West Bank.

Many of Israel’s closest allies, including the US, UK, France and Germany, had urged the Israeli government to rethink – they were ignored.

The UN secretary general said it will have “devastating consequences”, and the UK prime minister said he was “gravely concerned”.

The US state department has warned it could have implications under US law, which implies Washington might rethink arms transfers to Israel unless the ban is reversed – US law prevents the country from supplying military aid to anyone denying humanitarian access.

Although Israel says it will work to ensure aid is still provided to those who need it, no plan or alternative agency has been put forward, and it will be hard to replace UNRWA’s expertise built up over many decades.

UNRWA, the United Nations Relief and Works Agency, was set up in 1949 to support Palestinians displaced in the 1948 Arab-Israeli war.

Today it provides services including education, health services, street cleaning, financial start-up loans and accommodation to almost six million Palestinian refugees in Gaza, east Jerusalem, the occupied West Bank, Syria, Jordan and Lebanon.

Israel has long disagreed with the status of Palestinian refugees because, in theory at least, it gives them a “right to return”, which means they retain a claim to property and land in modern-day Israel.

Since the 7 October attacks, the Israeli state has repeatedly and vociferously accused UNRWA of being a front for Hamas, claiming that the group used schools and hospitals to hide weapons and plan attacks. 

Although nine UNRWA workers were sacked by the UN for having links to Hamas, many of Israel’s claims have been made with little supporting evidence.

A number of countries briefly suspended funding to the agency, but almost all have since restored it.

Israel has prevented many of its staff from entering Israel, including the agency’s commissioner-general.