Sweden has said it is resuming aid to the cash-strapped United Nations agency for Palestinians with an initial disbursement of $20m after receiving assurances of extra checks on its spending and personnel.

The UN Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA), the main humanitarian agency in Gaza, faced an unprecedented funding crisis after its major international donors led by the United States cut its funding over “terror” allegations.

Like several other countries, Sweden suspended aid to the UNRWA after Israel accused about a dozen of its employees of involvement in the October 7 Hamas-led attack before the conflict in Gaza.

Sweden said on Saturday that “the government has allocated 400 million kronor to UNRWA for the year 2024. Today’s decision concerns a first payment of 200 million kronor ($19.4)”.

To unblock the aid, the UNRWA had agreed to “allow controls, independent audits, to strengthen internal supervision and extra controls of personnel”, the government said.

The Swedish move came after the European Commission earlier this month said it would release 50 million euros ($54.7m) in UNRWA funding.

On Friday, Canada announced it was lifting a freeze on funding for the UNRWA, after it joined the US, the United Kingdom and other countries in cutting aid in late January.

“The agency is at risk of death, it is risking dismantlement,” the UNRWA chief Philippe Lazzarini said in an interview aired on Saturday.

“What is at stake is the fate of the Palestinians today in Gaza in the short term who are going through an absolutely unprecedented humanitarian crisis.”

The UNRWA has been at the centre of efforts to providing humanitarian relief in Gaza, where the UN Office for the Coordination of Humanitarian Affairs reported last month that at least half a million – or one in four people – face famine.

Israel has severely restricted the entry of humanitarian aid into Gaza by land, prompting the US and other countries to resort to stopgap measures such as airdropping meals into the enclave.

Such steps by the US, Jordan, the United Arab Emirates and Egypt have been criticised by aid agencies as a costly and ineffective way of delivering food and medical supplies.

The UNRWA has said that Israeli authorities have not allowed it to deliver supplies to the north of the Strip since January 23.