Prime Minister Benjamin Netanyahu on Sunday called for the dismantling of the United Nations Relief and Works Agency (UNRWA) after a tunnel was discovered running under two of its schools in Gaza.

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Netanyahu said he spoke to US Ambassador to the UN Nikki Haley about the issue during their meeting in Jerusalem last week . "I told her that the time has come for the UN to reconsider the continued existence on UNRWA," he said.

"Since World War Two, there have been – and continue to be today – millions of refugees. And these millions have the UN High Commission for Refugees (UNHCR), while most of the Palestinian refugees are settled and have a separate commission. This is UNRWA; it has its own institutions and considerable incitement against Israel," the prime minister said.

Prime Minister Netanyahu (Photo: AFP)

UNRWA, he added, "perpetuates, and does not solve, the Palestinian refugee problem. Therefore, the time has come to disband UNRWA and integrate it into the UNHCR."

Netanyahu also didn't spare Hamas his rod. "Hamas is using schoolchildren as human shields. This is the enemy that we have been fighting against for many years, an enemy that is committing a twofold war crime. On the one hand, it first attacks innocent civilians and then hides behind children," he said.

"I instructed the Foreign Ministry Director General to file an official protest against Hamas at the UN Security Council," Netanyahu added.

The tunnel, which was discovered about 10 days ago, passes under an UNRWA school for boys at the center of the Gaza Strip, east of Deir al-Balah. The school is part of a complex of two schools run by the agency.

The tunnel runs 2-3 meters under the school and continues deep into the Gaza Strip and towards the Israeli border fence.

UNRWA said it had protested the finding to Hamas, and the two sides agreed to seal off the section that goes under the school.