EU will keep aid for Palestine, for now, as pro-Israel states move to punish Palestinians over Hamas

The European Union and Gulf Cooperation Council called for sustained aid for the Palestinian territories on Tuesday following concerns it could be axed after the Hamas attack on Israel.

Foreign ministers from the two blocs met in the Omani capital Muscat following mixed messages over EU aid after Saturday's unprecedented assault, which put Israel on a war footing.

"They stressed the importance of sustained financial support for UNRWA (the UN Relief and Works Agency for Palestine refugees)," said a joint declaration read out by EU foreign policy chief Josep Borrell.

"And to continue humanitarian and development support for the Palestinians in the occupied territories."

Borrell said it was "false information" that Germany was cancelling aid after Saturday's attack, which was strongly condemned by the EU.

"The German minister has clearly stated that this was not the case at all, that Germany will continue providing this support," he told media.

"Certainly looking at the further development of the medium and long term, but not suspending."

The EU had earlier rowed back comments from neighbourhood commissioner Oliver Varhelyi on Monday that the 27-nation bloc was immediately suspending "all payments" to the Palestinians.

The EU's executive arm said it was reviewing hundreds of millions of euros (dollars) of development aid from the bloc, the biggest donor to the Palestinians, but that payments were not suspended.