The European Union Commission has announced the bloc's intention to suspend financial aid to Israel over its war in Gaza.

The Commission's President Ursula von der Leyen made the announcement during the State of the Union address at the European Parliament in Strasbourg, France, on Wednesday.

Von der Leyen said, in addition, the Commission is preparing punitive measures that could also see a partial suspension of the EU-Israel association agreement, which sought to grant Israel trade benefits.

She reiterated Europe’s position on the Gaza war and particularly the humanitarian crisis, stating that “Famine deliberately inflicted by a human being cannot be used as a weapon.”

However, funding for the Yad Vashem Holocaust Memorial and civil society organisations would not be suspended, the Commission's President said.

The EU's long-standing call has been for the two-state solution, supporting both Israel’s security and the future of the Palestinians.

Von der Leyen, however, warned that "economic isolation of the Palestinian Authority and radical rhetoric from members of Israel’s government are eroding prospects for a two-state solution."

The EU Commission's announcement comes as Israel steps up its offensive on the enclave targeting Hamas, but civilians continue to be starved and killed.

On Tuesday, Israel also struck Hamas leaders in the Qatari capital, Doha, drawing worldwide condemnation.