Israeli policemen remove anti-government protesters and supporters of Israelis held hostage in Gaza since the October 2023 attacks by Palestinian militants, who were holding a sit-in calling for their release near the prime minister's residence in Jerusalem on October 28, 2024. [AFP]

The United States said Monday it was "deeply concerned" about a bill, now passed by Israel's parliament, that bans the UN's Palestinian refugee agency from operating in the country and occupied east Jerusalem.

Israeli lawmakers passed the measure by a vote of 92-10, after years of harsh Israeli criticism of UNRWA, which intensified after the October 7, 2023 attacks by Hamas, which triggered war in Gaza.

"We have made quite clear to the government of Israel that we are deeply concerned by this," State Department spokesman Matthew Miller told reporters, reiterating the "critical" role the agency plays in distributing humanitarian aid in the Gaza Strip.

"We continue to urge the government of Israel to pause the implementation of this legislation. We urge them not to pass it at all, and we will consider the next steps based on what happens in the days ahead," Miller said.

The spokesman noted that US Secretary of State Antony Blinken had raised the issue during his recent trip to the region.

Israel has accused some UNRWA employees of taking part in the Hamas attacks.

Following those allegations, the United States suspended its contributions to the UN agency and demanded an investigation.

Congress has since approved legislation that bars any resumption of US financial assistance to the agency.

But the US government still believes that UNRWA plays an important role not just in aid delivery in Gaza, but also in "providing services to Palestinians in the West Bank and throughout the region as well."

"They really play an irreplaceable role right now in Gaza, where they're on the front lines getting humanitarian assistance to the people that need it," Miller told reporters.

"There's nobody that can replace them right now in the middle of the crisis."

The US opposition to the Israeli bill comes as Washington has called on Israel to do more to allow humanitarian aid to flow into war-ravaged Gaza, especially into the northern part of the besieged Palestinian territory.

Washington has warned that it could move to suspend some military aid to Israel if it does not do more on the aid front in Gaza.