The controversial head of a United Nations agency that oversees Palestinian refugees has resigned following allegations of misconduct involving him and other senior managers.

A U.N. ethics report in July that was reviewed by the Associated Press looked into allegations that the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) chief, Pierre Krahenbuhl, and other top management had “engaged in sexual misconduct, nepotism, retaliation, discrimination and other abuses of authority.” It was later taken up by the U.N.’s internal investigation office, the OIOS.

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Before the Swiss national’s resignation was announced, the United Nations spokesperson released a statement noting it had received a preliminary copy of the investigation from its in house investigative office (OIOS) relating to the UNRWA chief and senior management and that Krahenbuhl had been cleared of fraud and another charged but had stepped aside.

It stated: “The preliminary findings of this OIOS report exclude fraud or misappropriation of operational funds by the Commissioner-General. There are, however, managerial issues that need to be addressed. The Secretary-General has decided to place the Commissioner-General on administrative leave while those issues are further clarified so that a final determination can be made, and any appropriate action can be taken."

The U.N. statement added that the Secretary General had appointed Christian Saunders to “act as the Officer-in-Charge of UNRWA in the intervening time.”

A few hours later, an updated statement released by the U.N. said that he had resigned.

“The Secretary-General thanked Mr. Krahenbuhl for his commitment and constant dedication to UNRWA and to Palestine refugees. The Secretary-General reiterates his appreciation to UNRWA for their excellent work, which is essential to the well-being of Palestine refugees.”

The statement concluded: “At this time, it is vital that Member States and other partners remain committed to UNRWA and the services it provides. It is also critical for the international community to support the crucial work performed by the Agency in the areas of health, education, and humanitarian assistance, which is a source of stability in a volatile region.”

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Israel’s United Nations Ambassador Danny Danon welcomed the resignation and called for the closing of the embattled agency. Danon said in a statement sent to Fox News,

"The resignation of Secretary General Pierre Krahenbuhl is a victory in the campaign against the politicization and incitement against Israel that is at the root of the agency. Compounding this, numerous accusations regarding the agency's conduct signals to the international community that there is no other solution for UNRWA besides its total closure, and it is time to consider alternative models for the refugee issue."

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While the U.S. Mission to the United Nations had yet to release a statement on the resignation, in August a State Department official told Fox News that, “Our concerns about UNWRA go well beyond allegations about the conduct of individual UNWRA officials, although these are also of concern.”

The official continued, “As we have said, our primary concern is that UNWRA's fundamental business model is broken. The current UNWRA model has simply and clearly proved unsustainable."

The latest scandal to hit UNRWA comes at a time when its mandate is up for renewal. One United Nations diplomat familiar with the lobbying activities around the upcoming vote told Fox News that both the U.S. and Israel had been working together to produce reforms in the agency.

Those reforms included, the diplomat said, changing the renewal of the mandate to an annual vote rather than every three years and increase transparency and oversight given the ongoing problems involving the director general and the allegations that UNRWA schools teach anti-Semitic content.

One senior Republican aide told Fox News on background, “Everyone deliberately looks the other way at UNRWA's waste and corruption, because if they didn't they'd have no choice but to shut it down. This time it became too much to ignore, but lawmakers know that's just the tip of the iceberg. These scandals aren't going away.”

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The United Nations General Assembly is expected to overwhelmingly vote to renew the UNRWA mandate for another three years in the coming weeks.

Fox News' Adam Shaw and Paulina Dedaj and the Associated Press contributed to this report.