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Gaza City (Palestinian Territories) (AFP)

Thousands of employees at the United Nations agency for Palestinian refugees protested Monday in Gaza against US President Donald Trump's suspension of tens of millions of dollars in aid.

The United States suspended $65 million to the United Nations Relief and Work Agency (UNRWA) earlier this month, as well as a separate $45 million in food aid.

Thousands of teachers, medical professionals and other staff gathered in Gaza City to protest the cuts that UNRWA officials have warned could threaten the education of more than half a million children.

The agency provides support for more than three million Palestinians across the Middle East.

"By turning out in such huge numbers and peacefully you are giving a powerful message to the world," Matthias Schmale, UNRWA's director in Gaza, told the crowd.

Addressing the United States, he warned Trump of politicising humanitarian aid for millions of impoverished people.

"You have been our biggest partner for decades, the United States, and you have helped us build one of the most effective and results-orientated public service organisations in the world.

"Protect this investment -- all these people that are doing something good in the lives of refugees."

Trump has accused the Palestinians of refusing to engage in peace talks with Israel, saying last week they would suspend funding of aid until they returned to the table.

"We give them hundreds of millions of dollars in aid and support, tremendous numbers, numbers that nobody understands -- that money is on the table and that money is not going to them unless they sit down and negotiate peace," Trump said.

The Palestinian leadership froze ties with the Trump administration after his controversial recognition of Jerusalem as Israel's capital, saying Washington could no longer be the main mediator in talks with Israel.

The Palestinians see east Jerusalem as the capital of their future state.

© 2018 AFP