Denmark "will provide a new contribution of 10.2 million kroner to strengthen UNRWA's neutrality and internal reform process," the government said in a statement.
After Israel accused UNRWA of providing cover for Hamas militants, Israeli lawmakers passed legislation to bar the agency from operating within Israel as of January 30th.
Many donors cut their support for UNRWA following the accusations, though almost all have resumed their funding.
The UN has said that UNRWA will continue working in all Palestinian territories.
"The increased Danish support is an unambiguous signal that we stand behind UNRWA's work and mission. And that we support the organisation's strengthened focus on internal reform and neutrality," Danish Foreign Minister Lars Løkke Rasmussen said in a statement.
The minister also said he was "very concerned about the Israeli laws against UNRWA."
Denmark also announced that its entire annual contribution of 105 million kroner will be distributed immediately rather than throughout the year.
UNRWA has provided support for Palestinian refugees around the Middle East for more than 70 years, but has long clashed with Israeli officials, who have repeatedly accused it of undermining the country's security.
Israel alleges a dozen UNRWA employees were involved in the 2023 Hamas attack, and insists other agencies can step in to provide essential services, aid and reconstruction -- something the UN and many donor governments dispute.
A series of investigations, including one led by former French foreign minister Catherine Colonna, found some "neutrality-related issues" at UNRWA, but stressed Israel had not provided evidence for its headline allegation.
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