A Palestinian representative of U.S.-based Christian charity World Vision denies Israeli allegations that he funneled millions of dollars in aid money to the Islamist militant group Hamas, his lawyer said on Sunday.

Mohammad El Halabi, World Vision's manager of operations in the Gaza Strip, was arrested by Israel on June 15 while crossing into the enclave, which is under the de facto rule of Hamas, a group on the Israeli and U.S. terrorism blacklists.

Briefing reporters on Thursday, a senior Israeli security official said Halabi, who has run the group's Gaza operations since 2010, had been under surveillance.

The Israeli official said Halabi confessed to siphoning off some $7.2 million a year, about 60 percent of World Vision's Gaza funding, to pay Hamas fighters, buy arms, pay for other activities and build fortifications.

"Mohammad (El Halabi) denies all these accusations. He denied it all," Jerusalem-based lawyer Mohammad Mahmoud, who was assigned to represent El Halabi by the charity group, told Reuters by phone on Sunday.

Mahmoud said he met his client during a court session last week, and these were his first comments made publicly.

World Vision had already said it was "shocked" by Israel's allegations, and while it had no reason to believe them to be true, it would review the evidence.

Hamas has denied any connection to Halabi.

After the case was made public, Australia suspended aid to World Vision. The U.S. State Department, according to one official, is concerned by the allegations and following the investigation closely.

On Sunday, dozens of Palestinians who used to benefit from World Vision aid in Gaza rallied in solidarity with Halabi, demanding his release.