The UN agency for Palestinian refugees (UNRWA) on Monday condemned the Israeli parliament's approval of a bill banning its activities in Israel and occupied east Jerusalem, calling the move "outrageous".

"It's outrageous that a member state of the United Nations is working to dismantle a UN agency which also happens to be the largest responder in the humanitarian operation in Gaza," Juliette Touma, spokeswoman for UNRWA, told AFP.

"If it's implemented it's a disaster including due to the impact this is likely to have on the humanitarian operation in Gaza and in several parts of the West Bank," she said, adding the agency is the lead provider of "shelter, food and primary health care" in war-battered Gaza.