The Taoiseach has rejected claims that Ireland is being penalised for its stance on a ceasefire between Israel and Hamas.
No Irish citizens have been allowed leave the Gaza Strip since the Rafah Crossing with Egypt opened.
Mr Varadkar said there are around forty Irish citizens in Gaza and that he did not know when those seeking to leave the region would be able to do so.
People Before Profit TD Paul Murphy questioned whether Ireland is being punished for its policy on the conflict.
Deputy Murphy said that Irish citizens, together with Brazilian citizens, were “effectively being held hostage by the Israeli regime in Gaza”.
“While other countries’ citizens have been allowed to leave – the US, Germany and Britain, Irish and Brazilians have not been allowed to leave by Israel,” he added.
Speaking during Leaders’ Questions on Wednesday, the Taoiseach said there were roughly 8,000 EU and foreign nationals in Gaza.
“Only about 20 per cent of EU citizens have been allowed to leave so far, and we have been given no indication that Ireland is somehow being penalised for the stance we are taking in our call for an immediate humanitarian ceasefire but we will not change our position on that, no matter what.”
The Taoiseach said that expelling the ambassador for “exactly the same reasons that we did not expel the Russian ambassador in relation to Ukraine” is clearly not the right thing to do.
“There are around 40 Irish citizens being held in Gaza and we want them to be able to leave.
“There is also a young Irish-Israeli girl who may well be being held in Gaza as a hostage of Hamas as well. Let us not be just one sided about this. Our priority, no matter who is holding them, is for them to be able to get out and get out safety. That means we need to be able to engage with the Israeli Government and the Israeli ambassador.”
Mr Varadkar added that expelling the ambassador would not impact on Israel’s policy “It would not cause Israel to change course. Secondly, it would hamper our efforts to get the hostages out and to get citizens out and also to potentially have some sort of role in future peacebuilding and peacemaking in the area.”