World Vision doubts Israel fraud charges

World Vision has cast doubt that its Gaza Strip director could have embezzled more than $US7 million for the benefit of Hamas, as claimed by Israel.

File: A Palestinian woman hangs clothes in a section of a damaged apartment block, which was partially destroyed during the 2014 war between Israel and Hamas Source: AAP

The international charity World Vision say that Israel has accused the charity's Gaza Strip director of funnelling what appears to be an impossible sum of money to Hamas.

Israel's Shin Bet security agency said Mohammed el-Halabi siphoned about $US7.2 million ($A9.46 million) a year to the Islamic militant group over a period of five years. The security agency said this is roughly 60 per cent of World Vision's total Gaza budget.

World Vision Germany spokeswoman Silvia Holten said the charity's budget in Gaza in the last decade totalled $US22.5 million.

She said World Vision has stopped its Gaza operations while investigations continue. Germany and Australia suspended donations to World Vision in Gaza amid the allegations.

"There is a huge gap in these numbers the Israeli government is telling and what we know," Holten said.

Israel indicted el-Halabi last Thursday.

According to the Shin Bet, el-Halabi crafted an elaborate scheme to funnel funds, food, medical supplies and agricultural equipment to Hamas. He fraudulently listed the children of Hamas operatives as wounded, created straw organisation, and inflated project costs to divert cash, the agency said. Building supplies intended to support farming projects were transferred to Hamas for constructing tunnels and military installations, according to the Shin Bet.

The allegations, if proved correct, would bolster Israel's arguments for maintaining its blockade of Gaza, imposed after Hamas seized power in the coastal strip in 2007. Israel says the closure is vital to preventing Hamas from importing weapons and materials used to attack Israel.

Robert Piper, the UN coordinator for aid in the Palestinian territories, said on Monday that the allegations against el-Halabi "raise serious concerns" for aid groups in Gaza, and that, if proved, "deserve unreserved condemnation".

He called for a fair and transparent trial.

The United States also funded humanitarian projects run by World Vision through 2011, which overlaps with el-Halabi's time as Gaza director. The US State Department said in a statement that it is closely following the Israeli investigation. If confirmed, Hamas's embezzlement of aid funds would be "reprehensible", according to the statement.