The international community has slammed Israel's plan to designate the United Nations Relief and Works Agency for Palestine Refugees, or UNRWA, as a "terrorist organization", calling the proposal "outrageous" and warning that it would have "terrible consequences" in worsening the already dire situation in Gaza.

The Knesset, the unicameral parliament of Israel, on May 29 passed a preliminary reading of a bill designating UNRWA a terrorist organization. The bill will abolish immunity and privileges for UNRWA personnel, the Jerusalem Post reported.

Further, if the bill passes the final reading, the Anti-Terrorism Law will also apply to UNRWA, enabling Israel to cease all ties with the UN agency, and leading to closure of the humanitarian agency's operations in Israeli territory.

Mohammad Abualrob, director of the Palestinian Government Communications Center in the West Bank, told China Daily that Israel's allegations against UNRWA "are fundamentally baseless".

"Most donor countries supporting UNRWA have resumed their funding after recognizing the inaccuracy of Israel's claims. However, the Israeli Knesset's vote to designate the UN agency as a 'terrorist organization' will undoubtedly impact its operations in the Palestinian territories," said Abualrob.

This designation, he said, would affect the entry of UNRWA's foreign staff into Palestine, as "their access is controlled through Israeli crossing points".

"It will also hinder the agency's ability to pay salaries to its staff, procure aid, and distribute it to the 2.5 million Palestinian refugees in the West Bank, Gaza Strip, and Jerusalem who rely on this support," he added.

Christopher Lockyear, secretary general of Medicins Sans Frontieres International (MSF), said in a statement that the bill is an "outrageous attack on humanitarian assistance" and an act of collective punishment against the Palestinian people.

"Not only is humanitarian aid being obstructed, but if the bill passes a final reading, it will also be criminalized under Israel's Anti-Terrorism Law, in contradiction with international humanitarian law," said Lockyear.

He said it would have terrible consequences as it could amount to a "free license" to attack UNRWA facilities and its humanitarian personnel, and would further endanger civilians seeking the protection of the UN agency.

The MSF urged Israel's allies, which "are all members of the UN", to "stop the bloodshed" and "stand against this move to criminalize humanitarian assistance and ensure that UNRWA can continue its essential work".

Saudi Arabia and Qatar condemned the Israeli parliament's move, with the Saudi Ministry of Foreign Affairs saying in a statement that such classification "aims to lift the diplomatic immunity of UNRWA employees who are doing their duty to alleviate the severity of the humanitarian catastrophe that the Palestinian people are going through".

"The Kingdom stresses that Israel, as an occupying state, must abide by international humanitarian law and stop obstructing the work of international organizations," the Saudi ministry said.

Qatar's foreign ministry said in a statement that attempting to classify the UNRWA as a terrorist organization is "an extension of the systematic campaign aimed at dismantling the agency" at a time when the need for its humanitarian services is dire "due to the ongoing war in the Gaza Strip".

"The Ministry of Foreign Affairs renews the State of Qatar's call for the international community to stand firmly in the face of Israeli plans aimed at liquidating the agency and depriving millions of Palestinians in the Gaza Strip, the West Bank, Jordan, Syria and Lebanon of its necessary services," the statement said.

Also weighing in was the European Union, which said it was deeply concerned about the terrorist designation and the Israeli Land Authority ordering UNRWA to vacate its East Jerusalem premises within the next 30 days.

"We recall the crucial and irreplaceable role of UNRWA in the humanitarian response in Gaza. UNRWA provides vital services to millions of people in Gaza, the West Bank, as well as across the region, including in Lebanon and Jordan," the EU said in a statement on May 31.

"The EU is a firm supporter of the United Nations, and the multilateral and rules based global governance system, of which UNRWA, as a UN agency, is a part. We urge the Israeli authorities to allow UNRWA to continue carrying out its crucial work in line with its mandate," it added.

Last month, the International Crisis Group designated Gaza as "currently the most dangerous place for aid workers in the world". This was after the Aid Worker Security Database (AWDS) - a platform that tracks attacks on aid workers globally - documented a staggering 308 incidents that targeted aid workers in Gaza, causing 234 deaths since Oct 7 last year.