Australia’s Department of Foreign Affairs and Trade has suspended funding of World Vision programs in Palestine, after the head of the charity in Gaza was charged by Israel for allegedly providing funds to Hamas.

The World Vision Australia chief executive, Tim Costello, has welcomed the suspension but said the charity was “mystified” by the charges given that independent audits had found its programs in the Palestine were clean.

Israel’s domestic security agency Shin Bet alleges that Mohammad El Halabi, the zonal manager of the Gaza branch of World Vision, used his position to divert tens of millions of dollars of humanitarian funds to Hamas and its terrorist and military activities.

Donations were allegedly used to build a military base, dig military tunnels, pay salaries in Hamas’s military wing and buy weapons for Hamas in the Sinai.

The Israeli agency claims Halabi admitted during interrogation to being a member of Hamas since his youth and that he was ordered to “infiltrate” the US-headquartered charity.

The Department of Foreign Affairs and Trade (DFAT) said in a statement: “The allegations that a locally employed World Vision employee in the Gaza Strip has diverted aid funds from a range of international donors and provided support to Hamas are deeply troubling.”

It confirmed that World Vision had received Australian funds for programs in Palestine, reportedly a total of $5m in the past three years.

The department is “investigating this as a matter of the highest priority”, it said.

“Officials are urgently seeking more information from World Vision and the Israeli authorities.”

DFAT announced it was suspending the provision of further funding to World Vision for programs in Palestine until the investigation was complete.

“Australia’s aid to the Palestinian territories is intended for vital humanitarian and development assistance to the Palestinian community.

“Any diversion of the generous support of the Australian and international community for military or terrorist purposes by Hamas is to be deplored and can only harm the Palestinian people.”



Costello told Guardian Australia: “I want to reassure Australians that World Vision’s money in Gaza is being spent on reducing poverty for Palestinian people, not terrorism.”



Costello told ABC24 on Friday that Dfat had done the right thing by suspending aid pending an investigation of the “serious charges”. In comments to Guardian Australia Costello said the charity would not make decisions on its sponsorship until it had further details and reviewed the evidence.

He said the charges came as a “profound shock and are incredibly mystifying ... because all of our forensic audits, done by PricewaterhouseCoopers, are absolutely clean”.

“We have nothing to do with terror, with diverting funds, and other donor governments, besides the Australian government, that fund us, have done audits too, without ever any suggestion of this impropriety.”

Costello said World Vision’s Jerusalem office managed a $12m a year program in the West Bank, Israel and Gaza Strip.

The Gaza program was worth $3m and mainly consisted of physical assets, including child-friendly spaces for traumatised children and agricultural programs such as strawberry farms.

Costello said the charity had so far seen no evidence against Halabi, who had been in detention for 50 days, of which 23 were without a lawyer.

He said he was glad Halabi had been charged because only “one side” – the allegations – had been aired, and the court would find out the truth of the matter.