Hazon Yeshaya UK, which supports soup kitchens for Israel's poor, has suspended fund-raising pending an investigation into the use of its donations.
Supporters were told at the end of last week that the charity had commissioned financial services firm Deloitte to check that its funds were being "properly applied" in Israel.
In a statement, the charity's trustees said: "Until we are all reassured, Hazon Yeshaya UK is suspending the transmission of funds to Israel."
The British charity, which raises around £750,000 a year, is part of an international network which provides thousands of meals a month to the needy in Israel, as well as dental treatment and vocational training.
Hazon Yeshaya was founded in Jerusalem in 1997 by Rabbi Abraham Israel, whose family relied on soup kitchens in Paris after fleeing Egypt when he was young. After later establishing himself in business, he moved to Israel. The UK branch was first alerted to concerns about the Israel operation by Hazon Yeshaya Canada a few weeks ago.
As a result of inquiries by Deloitte's Israel office, Hazon Yeshaya UK acted to freeze the transfer of donations last week.
The charity's trustees hoped that their concerns would be "resolved in the near future and that we will be able to resume payments to help the beneficiaries in Israel".
Hazon Yeshaya Hong Kong has also suspended its fund-raising.
But the central charity in Israel said this week that there was "no cause for concern." It was fully co-operating with the Deloitte audit, a spokesman said, and it was confident that the report would "prove that all donations are being properly applied in Israel according to the principles of good governance."
It was "dismayed" that UK supporters had been told about the inquiry before it was concluded.