TEL AVIV—Israel said it arrested an employee of international Christian charity World Vision for allegedly siphoning off tens of millions of dollars in aid destined for projects in the Gaza Strip and giving it to Islamist movement Hamas.

Prosecutors on Thursday charged Mohammed El-Halabi, director of the Gaza branch of World Vision, with funding Hamas with up to $7.2 million a year over more than five years. He was detained June 15 at a crossing into the Palestinian enclave.

...