Israel has charged a manager of World Vision’s Gaza office with passing millions of dollars to the Palestinian hardline militant group Hamas.

World Vision official Mohammed El Halabi appeared before a court today, facing charges of using millions of charity funds to pay Hamas fighters and buy weapons.

The ABC understands the Australian Government has given the charity more than $5 million in the past three years for projects in the Gaza Strip.

The Department of Foreign Affairs and Trade said it was suspending the provision of funding to World Vision in the Palestinian Territories until an investigation is complete.

The Israeli intelligence agency Shin Bet claimed Hamas recruited Mr Halabi more than a decade ago.

The agency said since Mr Halabi took over World Vision operations in Gaza in 2010, roughly 60 per cent of World Vision’s annual budget in the territory — $US7 million a year — was diverted to Hamas, including its military wing the al-Qassam brigades.

World Vision ‘profoundly shocked’ at allegations

In March this year, Mr Halabi took the Australian Ambassador to Israel, Dave Sharma, on a tour of Australian funded aid projects in the Gaza Strip.

They visited an agricultural scheme and a strawberry farm, all part of World Vision aid work in Gaza that the Australian Government has given over $5 million to over the past three years.

But today Mr Halabi appeared in a courtroom in the Israeli town of Beersheba, wearing a prison uniform, flanked by two armed Israeli guards.

He has been charged with using millions of World Vision funds to pay Hamas fighters, buy arms, pay for Hamas activities and build fortifications.

Mr Costello said he is concerned over the conditions of Mr Halabi’s detention.

World Vision Australia chief executive officer Tim Costello said Mr Halabi has worked with World Vision for 10 years, and that they have “no reason to believe” the allegations against their employee are true.

“I’m profoundly shocked. And they are very explosive allegations,” Mr Costello said.

“We have PricewaterhouseCoopers that audit us each year. We’ve got the 2014 audits, the 2015 audits that just came in a few weeks ago.

“We have not just our own internal processes to check about connections to terror or terrorists — we have an independent body outside World Vision that interviews and does security checks.”

Israeli authorities accuse Mr Halabi of initiating a greenhouse project in order to use the greenhouses to hide the sites where terror tunnels were being dug.

‘We have only heard one side’

World Vision said it still has not been briefed on the charges and has seen no evidence.

“This is what is really worrying us,” Mr Costello said.

“I was a lawyer for 15 years and I can tell you there are always two sides, and we have only heard one side.

“So I’m really wanting a fair process, and the other side, which is Mohamed’s side to actually be heard before judgment is made.”

Mr Costello said he is concerned over the conditions of Mr Halabi’s detention and alleged confession.

“It certainly concerns me that a person can be in detention for 25 days without seeing a lawyer,” he said.

“Over 50 days without seeing family members and even World Vision staff.

“That certainly does concern me.”

DFAT investigating with highest priority

The Israeli intelligence agency Shin Bet said there is no evidence World Vision’s main office was aware of Mr Halabi’s alleged actions.

But an Israeli spokesperson said that the charity is going to have to answer some tough questions, saying it was “astounding” that millions could allegedly be siphoned off without oversight.

“We do not absolutely do not support Hamas or have anything to do with terror which is why these allegations — particularly because we have seen no evidence — have really profoundly shocked us,” Mr Costello said.

A Hamas spokesman in Gaza claimed the group had “no connection to Mr Halabi and therefore all Israeli accusations are void”.

Foreign Minister Julie Bishop was not available for comment.

But in a statement, a spokesperson for the department said it is investigating the incident as a matter of the highest priority, with officials urgently seeking more information from World Vision and Israeli authorities.