The United Nations said the London-born Yusuf Islam recorded a rendition of the George Harrison song "The Day the World Gets Round," along with the German bassist and former Beatles collaborator Klaus Voorman.
Gaza officials say 280 of the 1,285 Palestinians killed in the three-week Israeli offensive were children. Children make up 56 percent of Gaza's 1.4 million people. The offensive aimed at stopping rocket fire by Gaza's Hamas rulers into southern Israel.
Islam explained on his Web site that he hoped the song would "help remind people of the immense legacy of love, peace and happiness we can share when we get round to looking at mankind's futile wars and prejudices, and start to change our foolish ways."
UNRWA said the donation would help it continue its vital work in the Gaza Strip.
"This is a fantastically generous act and we hope to reach new audiences in bringing a message of hope at a time when Gaza so badly needs it," said Christopher Gunness, an UNRWA spokesman.
Cat Stevens sold 60 million albums in a prolific musical career that included the hit songs "Wild World," "The First Cut is the Deepest" and "Peace Train." In 1977, he converted to Islam, changed his name and largely distanced himself from popular music.
He also courted controversy by allegedly funding charities that were fronts for the Islamic militant group Hamas. Israeli authorities have barred Islam twice from entering the country because of his alleged ties to Hamas.
He also allegedly supported the Islamic edict calling for the death of author Salman Rushdie, though he said he was misunderstood.
Throughout the years, Islam recorded a handful of spoken-word records on Islamic topics, some with percussion. In 2006, he made a mini-comeback to pop music, recording his first album since his conversion titled "An Other Cup."
On the Net: http://www.jamalrecords.com/cgi-bin/commerce.cgi?displayhome .