Denmark and Sweden said Tuesday they were suspending Palestinian development aid but maintaining humanitarian assistance following the Hamas militant group's attack on Israel.
The announcements came a day after the European Commission launched a review of its development aid to the Palestinians.
The government in Copenhagen said in a statement it "has decided to put Danish development assistance to Palestine on hold".
"A thorough review will be conducted to ensure that no Danish funding is misused to indirectly support terrorist organisations that attack Israel," it said.
The review will be conducted "in close dialogue with Denmark's partners in the EU and the Nordic countries," it said.
For 2023, Denmark had earmarked humanitarian and development aid totalling 235.5 million kroner ($33.5 million) for the Palestinian territories.
Around 72 million kroner of development aid has yet to be disbursed.
"It is this assistance that is now being put on hold," the statement said.
Sweden also said it was suspending development aid but did not provide any immediate details on the amount.
Austria and Germany have also announced that they were suspending development aid.