The federal Liberals are providing $25 million to a UN relief agency for Palestinian refugees that was cut off by the previous Conservative government for alleged ties to Hamas.

International Development Minister Marie-Claude Bibeau made the announcement at a news conference and also during question period in the House of Commons — news that was greeted by cries of "shame" from the opposition benches.

The United Nations Relief and Works Agency for Palestine Refugees, also known as UNRWA, lost federal funding in 2010 amid allegations it was tied too closely to Hamas, considered a terrorist organization by Canada and others.

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Bibeau says $20 million will go support education, health and social services for millions of vulnerable Palestinian refugees, as well as urgent humanitarian assistance.

An additional $5 million is being provided in response to the agency's appeal for help for those impacted by the crisis in Syria and its environs.

"I'm horrified," said Conservative foreign affairs critic Peter Kent, who said there is ample proof that "massive amounts" of UN aid have been redirected to support Palestinian military efforts against Israel.

"We have abundant evidence that UNRWA is part of the problem."

The government says the money will be accompanied by "enhanced due diligence," including a "very robust oversight and reporting framework" that includes regular site visits and anti-terrorism provisions.

"Millions of Palestinian refugees across the Middle East have the right to receive basic services such as health care and to send their children to school," Bibeau said in a statement.

"We want to see Palestinian refugee children in classrooms where they can learn universal values of tolerance and respect. Vulnerable Palestinians deserve all the opportunities they can to contribute positively to their communities and Canada's funding will help to better the lives of millions of refugees."

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Conservative MP Andrew Scheer, one of several caucus members seeking to become the party's full-time leader, said humanitarian money should go to groups which focus on aid, not politics.

"UNWRA is an obstacle to achieving peace in the Israeli-Palestinian conflict," Scheer said in a statement.

Bibeau's announcement touched off a flood of reaction from both sides of the Israeli-Palestinian divide.

David Cape, chair of the Centre for Israel and Jewish Affairs, said his group respects the need to provide humanitarian aid to the region, but nonetheless has "serious reservations" about the UN agency in question and its alleged Hamas ties.

"Hamas is notorious for diverting funds and materials provided by the international community intended for humanitarian aid to terrorist purposes," Cape said in a statement.

"We have communicated our concerns about UNRWA's accountability and neutrality to the government and we appreciate both the government's acknowledgment of these concerns and the measures Canada has now put into place to ensure meaningful accountability and oversight."

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Refael Barak, Israeli ambassador to Canada, said his country is reassured that Canada is promising to keep an eye on how its money is used. He said UNRWA schools have been used to hide missiles and weapons for Hamas and other terrorist groups.

Independent Jewish Voices Canada, which promotes a solution to the Israel-Palestinian conflict through respect for international law and human rights, also welcomed Bibeau's announcement.

"After numerous years of Canada withholding funding, we are delighted to see that the Liberal government is committed to the well-being of millions of vulnerable Palestinian refugees through the restoration of funding to UNRWA," said spokesperson Tyler Levitan.

Thomas Woodley, president of Montreal-based Canadians for Justice and Peace in the Middle East, said the decision indicates the Trudeau government "has finally differentiated itself from the Harper government in regards to the Middle East."