Prime Minister Christopher Luxon on Tuesday confirmed New Zealand was reviewing future payments to the United Nations Relief and Works Agency for Palestine Refugees (UNRWA).
It follows accusations by Israel that agency staff were involved in the Hamas' attacks on 7 October, which left about 1300 dead and about 250 taken as hostages.
Foreign Affairs Minister Winston Peters told Morning Report the allegations warranted a proper investigation.
But he said the critical issue was the humanitarian crisis in Gaza.
According to the Hamas-run health ministry more than 26,000 people have been killed in Gaza since Israel launched a military operation in response to 7 October.
Peters said it was possible there were a few "rotten apples" within UNRWA.
"If the matter has been dealt with, and with assurances that it does not happen in the future, then the crisis is of a level, we must, I believe, and I think the New Zealand people would want us to respond to the crisis rather than to react in that way and punish a whole lot of innocent people because of the actions of a few."
Peters said it would be premature to make a decision before the UN finishes its investigation.
RNZ
