Israel says it has arrested a United Nations employee for allegedly providing "material assistance" to the Islamist movement Hamas.

Key points: Israel says UN employee performed "various assignments" for Hamas

Israel says UN employee performed "various assignments" for Hamas UNDP expresses great concern at allegations

UNDP expresses great concern at allegations Israel indicted a senior World Vision staffer last week

Wahid Abdallah al Bursh, a Palestinian engineer who has worked with the United Nations Development Program (UNDP) since 2003, was arrested on July 16, a government statement said.

Israel's Shin Bet security agency said he had confessed to being recruited in 2014 to help Hamas.

Among "various assignments" he performed on behalf of Gaza's dominant Islamist group was assistance in building a maritime jetty for its fighters "using UNDP resources", the Shin Bet statement said without providing further details on that charge.

It said Bursh also persuaded his UNDP superiors to prioritise the neighbourhoods of Hamas operatives when earmarking money for reconstruction in Gaza, which was devastated by a 2014 war with Israel.

"This investigation proves yet again the way in which Hamas exploits aid resources of international groups in the Gaza Strip which are meant for the civilian population," the Shin Bet said, adding Bursh had been indicted in an Israeli court.

The UNDP said in a statement that Bursh, a contractor, had been detained by Israel on July 3 and said it was greatly concerned by the allegation and that it "has zero tolerance for wrongdoing in all of its programs and projects".

The agency said Bursh had provided services to its rubble removal project in Gaza and the Israeli allegations relate to about 300 tonnes, or seven truckloads out of about 26,000, from the project, which has cleared about one million tonnes of rubble and 2,761 unexploded ordnance.

World Vision sceptical of charges against its employee

Last week, Israel indicted a senior Palestinian staffer with the US-based charity World Vision on charges of funnelling millions of dollars to Hamas in Gaza.

That suspect, Mohammed El Halabi, denied the charges, as did Hamas, while World Vision said it had yet to see evidence to back up Israel's allegations.

It was not immediately clear how Bursh would plead to the charges against him. Hamas dismissed the new allegations as a bid by Israel, which along with neighbouring Egypt blockades Gaza, to control the enclave.

"These [allegations] are par for the course of an Israeli plot to restrict the work of international relief agencies operating in Gaza in order to tighten the Gaza blockade," Hamas spokesman Sami Abu Zuhri said.

Israel informed UN Secretary-General Ban Ki-moon's office and the UNDP director in New York of Bursh's arrest and details from his indictment, an Israeli Foreign Ministry spokesman said.

The spokesman said Israel expected UN condemnation of Hamas' alleged use of the Gaza aid system and that the relevant agencies "will take concrete measures to ensure that humanitarian activities actually assist those in need in Gaza".

Responding on Monday to the Israeli indictment against Halabi, the UN Coordinator for Humanitarian Aid and Development Activities in the Occupied Palestinian Territory, Robert Piper, voiced alarm.

"If proven by a due legal process, these actions deserve unreserved condemnation; Gaza's demoralised and vulnerable citizens deserve so much better," he said in a statement.

But World Vision was sceptical at the Shin Bet's allegation that Halabi had siphoned off about $US7.2 million ($9.4 million) a year in charity money for Hamas since 2010. The indictment filed against Halabi speaks more generally of "millions of dollars".

"World Vision's cumulative operating budget in Gaza for the past ten years was approximately $US22.5 million ($29.4 million), which makes the alleged amount of up to $US50 million ($65 million) being diverted hard to reconcile," charity president Kevin Jenkins said in a statement.

Reuters/AFP