Designating the whole of Hamas as a terrorist entity ignores the real issues in the Israel-Gaza conflict, and flies in the face of New Zealand diplomatic calls for a humanitarian ceasefire, an international relations expert says.
It is now illegal for anyone in New Zealand to support Hamas, after the government designated the political wing of Hamas as a terrorist entity.
It made the same ruling about the group's military wing back in 2010.
The designation freezes any of Hamas' assets here and makes it a criminal offence to participate in or support its activities.
Otago University international relations professor Robert Patman said for many observers, this looks like a "curious" tilt towards the US-Israel position.
He said that New Zealand, unlike its Five Eyes partners, had been calling for an immediate humanitarian ceasefire in Gaza since 27 October.
"Recently we confirmed that position in line with our partners in Australia and Canada. The United States, which we've just tilted towards, has been consistently opposing New Zealand's position."
Dr Patman told RNZ's Morning Report the earlier distinction between Hamas's military and political wings recognised the way it worked.
"The trouble with defining Hamas as just a terrorist organisation per se, is that it implies that Hamas is the single problem in the Israeli-Palestinian issue, or the conflict between them, whereas the problem is a wider conflict between Israel's desire for security and the Palestinian desire for self-determination."
Dr Patman said it was important to remember that Hamas was created in 1987 as part of an uprising against Israel's occupation of the Palestinian territories.
"In a sense, for many observers, the New Zealand position would look like a tilt towards the Biden-Netanyahu position, that Hamas is a central problem, and ignores the context of Israel's occupation and blockade of Palestinian territories.
"[This] has enabled Hamas to present itself as an armed resistance group prepared to use terrorism to defend Palestinian rights."
The government said it was acting against the extremes of both sides of the Israel-Hamas conflict.
It has also introduced sanctions on more than a dozen Israeli settlers.