The UN Palestinian refugee agency UNRWA appealed on Thursday for more aid from international donors to help alleviate a "grave" financial crisis it faces as it marks its 60th anniversary.

Speaking on the sidelines of the UN General Assembly, UNRWA's chief was joined by Palestinian President Mahmoud Abbas and Jordan's Queen Rania in appealing for more international assistance for the agency dealing with the humanitarian side of one of the world's longest running refugee situations.

"I strongly appeal to the international community to furnish the levels of financial and political support UNRWA requires to serve Palestine refugees better," said Karen AbuZayd, Commissioner-General of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

"It is unacceptable that UNRWA should currently be facing a grave funding deficit that threatens its ability to continue delivering services."

UNRWA provides food, medical, educational and other assistance to 4.6 million Palestinian refugees in Jordan, Syria, Lebanon, the West Bank and the Gaza Strip. It was set up in 1949, a year after the creation of Israel.

"I wish there was no need for UNRWA. I wish there was no anniversary to mark," Queen Rania, herself of Palestinian origin, said in a speech. "And now, the agency that is the lifeline for Palestinian refugees ... is, once more, on the verge of financial collapse," she said.

In January, the queen made a YouTube video for UNRWA describing Gaza as "Hell on Earth." The video was made in the wake of an Israeli offensive against Hamas militants in which more than 1,000 Palestinians were killed and the strip remains under tight Israeli restrictions.

"I never imagined that, eight months on, after pledges of almost $4.7 billion, it would still be: Hell. On. Earth. But that is the shameful truth," Queen Rania said.

"Not one penny of the billions pledged for reconstruction has reached Gaza!" she said, noting thousands of Gaza homes are still not rebuilt and other infrastructure remains fractured.

"We call on the international Community to increase their support for this agency's vital work," said Abbas, thanking donor nations for responding to recent emergency appeals to enable UNRWA to provide essential services "despite the serious financial challenges faced."

The future of Palestinian refugees remains one of the thorniest issues in the Palestinian-Israeli peace process which Washington is trying to restart.

Arab foreign ministers who met on Tuesday ahead of the UN General Assembly said resumed Arab-Israeli peace talks should tackle all issues, including the fate of the refugees and the status of Jerusalem.