It “cannot be” in Israel’s interest to implement blocks on the only aid organisation still operating in Gaza, despite the country’s parliament tabling legislation to do so, Foreign Secretary David Lammy has said.

Mr Lammy said Israel could pass two Bills that would effectively sever ties with the UN agency responsible for distributing aid, but that “we must hold out that the Israeli government does not implement this legislation”.

Israel’s parliament will vote on two Bills that would strip UNRWA (United Nations Relief and Works Agency) of legal immunities and restrict its ability to support Palestinians in east Jerusalem and the West Bank.

More than 1.9 million Palestinians are displaced from their homes and Gaza faces widespread shortages of food, water and medicine.

Israel accuses UNRWA of turning a blind eye to Hamas militants it claims have infiltrated its staff, including a small number of its 13,000 employees in Gaza who took part in the October 7 2023 attack on southern Israel.

During a statement on the Middle East, Mr Lammy told MPs it is “a matter of profound regret” that the Israeli parliament is considering shutting down UNRWA’s operations, adding that allegations against the organisation’s staff were “fully investigated and offer no jurisdiction for cutting off ties”.

He said: “This weekend we therefore joined partners in expressing concerns at the Knesset’s legislation and urged Israel to ensure UNRWA’s lifesaving work continues.”

Foreign Secretary David Lammy with members of the Jewish community at South Tottenham Synagogue in London (Dan Kitwood/PA)

Conservative former minister Kit Malthouse asked the Foreign Secretary if there would be “any consequence whatsoever for the Israeli government”, if they continue to block aid to Palestinian civilians.

He said: “If as everybody expects, the Israeli government ignores the pleadings of the Foreign Secretary and our allies and proceeds with the dismantling of UNRWA, making their job impossible, what will he do next?”

Mr Lammy replied: “When I raised this issue with foreign minister (Israel) Katz yesterday, he was at pains to explain to me that whilst parliament could pass this Bill today, the Knesset could pass this Bill today in Israel, it did not mean it had to be implemented.

“And so I think we must hold out that the Israeli government does not implement this legislation because it’s not in their interests.

“It cannot be in their interests for the only aid organisation, not just providing health care, but also schools for young people, and of course, working not just in Gaza but also in the occupied territories.

“It simply cannot be in their interests to do this, because they would have to then provide that themselves.”

Asked by Labour MP Patricia Ferguson (Glasgow West) if the Government would “consider serious sanctions against those who are proponents” of further reducing the flow of aid, Mr Lammy said: “Yes, the truth is if UNRWA is brought to its knees, that would be a very, very serious event indeed.”

Labour MP for Sheffield South East, Clive Betts, said the Israeli government “ignores requests to stop the destruction of Gaza,” as he also called on Mr Lammy to sanction Israeli ministers who vote in favour of blocking UNRWA.

He said: “If the Israeli government actually carries out restrictions on UNRWA in a formalised way, that members of the government who agree to that should also be sanctioned for that?

“Otherwise, aren’t we just issuing empty threats and empty words that the Israelis ignore?”

Mr Lammy said he “condemned in no uncertain terms” the “vile language that’s been used by extremist elements within the Israeli government”, adding that sanctions remain under review.

He went on to say that the use of the word “genocide” in relation to the war in Gaza risks undermining genocides such as the Holocaust.

Conservative MP Nick Timothy (West Suffolk) said: “There is obviously much suffering in Gaza, and we all accept that, but this terminology is completely inappropriate.”

Mr Lammy said: “I do agree with (Mr Timothy) those terms were largely used when millions of people lost their lives in crises like Rwanda, the Second World War in the Holocaust, and the way that they are used now undermines the seriousness of that term.”

Earlier in the session the Foreign Secretary confirmed that UK troops were not involved in assisting Israel’s retaliatory strikes on Iran.

On Monday Sir Keir Starmer welcomed Lebanese prime minister Najib Mikati to Downing Street for a bilateral meeting.

They shook hands outside Number 10 as the Prime Minister offered Mr Mikati his “condolences for the very many losses in your country”.

Mr Mikati thanked Sir Keir for calling for a ceasefire in the region and for Britain’s support on humanitarian matters.