Millions of Palestinians rely on the UN agency, not only in Gaza but also across the West Bank and occupied East Jerusalem. | ITV National News

The law that bans the United Nations agency that aids Palestinian refugees in Gaza went into effect on Wednesday.

In the Shuafat refugee camp, a hardscrabble district in east Jerusalem surrounded by a hulking concrete wall, intense security checks make venturing out exasperating.

The agency, UNRWA, will be banned from operating on Israeli soil, and contact between it and Israeli officials will also be forbidden.

Laws passed in October went into effect, barring the U.N. agency from the Jewish state and barring state officials from communicating with the group.

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Tens of thousands of Palestinian refugees in Israeli-occupied East Jerusalem were set to lose education, healthcare and other services provided by U.N. agency UNRWA as an Israeli ban on the organisation takes effect on Thursday.

Israel has banned a key UN agency from operating in Israel, making the future of its operations in Gaza and the West Bank unclear.

The directive came in a letter to the U.N., after the Israeli Parliament banned the relief agency that has aided Palestinian refugees for decades.

Buses carrying freed Palestinian prisoners left an Israeli prison on Thursday after chaos during the release by Gaza militants of three Israeli hostages and five Thais led to a brief delay in the process.

Israel has formally banned the main United Nations aid agency for Palestinian refugees from operating on its territory despite heavy diplomatic backlash.