The German government has pledged to significantly increase its funding for the UN agency that supports Palestinian refugees after the United States cut its aid.

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German Foreign Minister Heiko Maas said the funding crisis for the United Nations Relief and Works Agency (UNWRA) was fueling uncertainty.

"The loss of this organization could unleash an uncontrollable chain reaction," he said.

Germany had already provided 81 million euros ($94 million) in aid for UNWRA this year, he said, and was preparing to increase its contribution. He gave no figure.

German Foreign Minister Heiko Maas (Photo: EPA)

"We are currently preparing to provide an additional amount of significant funds," Maas said in a letter to European Union foreign ministers that was seen by Reuters.

Maas said it was clear that the added German funds would not cover a $217 million deficit left by the US withdrawal, and urged the European Union and other states to work towards "a sustainable finance basis for the organization".

It is part of a broader push by Maas to take a more assertive stance in disagreements with the United States on a range of issues including trade, military spending and climate change.

Jordan said on Thursday it would lead a campaign to raise funds to help the UN agency survive, including an appeal to the Arab League.

President Donald Trump (Photo: AP)

UNRWA has faced a cash crisis since the United States, long its biggest donor, earlier this year slashed funding, saying the agency needed to make unspecified reforms and calling on the Palestinians to renew peace talks with Israel.

In January, the United States said it would give UNRWA $60 million in aid but would withhold a further $65 million "for future consideration."

Last week, the State Department announced that it had decided to cut more than $200 million in bilateral aid to the Palestinians, following a review of the funding for projects in the West Bank and Gaza.

Then, in what threatened to be a possible coup de grace against UNRWA, the Washington Post reported Friday that President Donald Trump is gearing up to announce in the coming weeks that his administration will be ending all US funding to to the organization.

The agency was founded in 1949 after the first Arab-Israel war—the War of Independence—in the wake of the exodus of around 700,000 refugees who fled or were driven out of Israel on its founding as a state.

As a result, UNRWA now looks after more than 5 million descendants of those original refugees, in Jordan, Lebanon, Syria and the Palestinian territories of the West Bank and Gaza Strip.

UNRWA now looks after more than 5 million people in Jordan, Lebanon, Syria and the Palestinian territories of the West Bank and Gaza Strip.

UNRWA facility in Gaza (Photo: Reuters)

The nascent state of Israel absorbed Jewish refugees who were expelled or who fled from neighboring Arab countries, while other Arab states refused to grant the Palestinians citizenship.

Israel argues that UNRWA perpetuates the Palestinian refugee problem by grossly inflating the number of bonafide refugees.

Since the agency includes descendants of Palestinian refugees from the War of Independence, it grants refugee status to Palestinians according to a criteria that is not adhered to in any other refugee question.

UNRWA has become the subject of significant scrutiny since President Trump entered the White House.

After appointing his son-in-law Jared Kushner as a Mideast advisor charged with formulating a long-awaited peace initiative to put an end to the decades-long Palestinian-Israeli conflict, the UN refugee organization appeared to occupy a significant spot on his radar.

In an internal email recently published by Foreign Policy magazine, Kushner called for a "sincere effort to disrupt UNRWA."

"This (agency) perpetuates a status quo, is corrupt, inefficient and doesn't help peace," he reportedly wrote in an email dated January 11.

Last week, US Ambassador to the United Nations Nikki Haley appeared to question the world body's count of Palestinian refugees.

By casting doubt on what some describe as an inflated number of Palestinian refugees, the US is removing a central stumbling block that has frustrated peace negotiations in the past, which calls for the so-called “right of return” of the millions of Palestinians defined as refugees by the UN.

Palestinians have clung to the notion that the refugees and their descendants should be allowed to settle in Israel as part of any peace deal, a precondition Israel says is designed to destroy its Jewish majority and therefore eradicate the Jewish state.

For Nikki Haley, however, the decision to withhold funds to the organization also stems from the Palestinians’ “bashing” of the US, despite the fact that it has for years been the chief financial donor to UNRWA.

“First of all, you’re looking at the fact that, yes, there’s an endless number of refugees that continue to get assistance, but more importantly, the Palestinians continue to bash America,” she said during a conference at the Washington-based Foundation for Defense of Democracies.

Ambassador Nikki Haley (Photo: AFP)

Moreover, Haley has also expounded the administration’s view that other Arab countries should be be taking greater responsibility to assist the organization rather than leaving it to the US to pay the lion’s share of financial aid, which amounts to one third of the total budget.

“Where is Saudi Arabia? Where is the United Arab Emirates? Where is Kuwait? Do they not care enough about Palestinians to go and give money to make sure these kids are taken care of?” Haley asked.

Some in Israel have even tougher criticism for the organization, accusing UNRWA of teaching hatred of Israel in its classrooms and tolerating or assisting Hamas terrorists in Gaza.

In July last year, the agency said it was investigating after finding 20 rockets hidden in one of its vacant schools in the Gaza Strip.</s>BERLIN (Reuters) - The German government has pledged to significantly increase its funding for the U.N. agency that supports Palestinian refugees after the United States cut its aid.

German Foreign Minister Heiko Maas said the funding crisis for the United Nations Relief and Works Agency (UNWRA) was fueling uncertainty.

"The loss of this organization could unleash an uncontrollable chain reaction," he said.

Germany had already provided 81 million euros ($94 million) in aid for UNWRA this year, he said, and was preparing to increase its contribution. He gave no figure.

"We are currently preparing to provide an additional amount of significant funds," Maas said in a letter to European Union foreign ministers that was seen by Reuters.

Maas said it was clear that the added German funds would not cover a $217 million deficit left by the U.S. withdrawal, and urged the European Union and other states to work toward "a sustainable finance basis for the organization".

It is part of a broader push by Maas to take a more assertive stance in disagreements with the United States on a range of issues including trade, military spending and climate change.

Jordan said on Thursday it would lead a campaign to raise funds to help the U.N. agency survive, including an appeal to the Arab League.

UNRWA has faced a cash crisis since the United States, long its biggest donor, earlier this year slashed funding, saying the agency needed to make unspecified reforms and calling on the Palestinians to renew peace talks with Israel.

The agency was founded in 1949 after the first Arab-Israeli war, in the wake of the exodus of around 700,000 refugees who fled or were driven out of Israel on its founding as a state.

UNRWA now looks after more than 5 million people in Jordan, Lebanon, Syria and the Palestinian territories of the West Bank and Gaza Strip.</s>AMMAN (Reuters) - Jordan said on Thursday it would lead a campaign to raise funds for the U.N. agency that supports Palestinian refugees, to help it survive after the United States cut its funding.

Foreign Minister Ayman Safadi said a meeting next month in New York on the sidelines of the U.N. General Assembly would mobilize support for the United Nations Relief and Works Agency (UNRWA) to continue core education and health services.

“Any shortage in funding will drive hundreds of thousands towards deprivation and despair,” Safadi, whose country has 2.2 million U.N. registered Palestinian refugees, said in Amman after meeting Pierre Krahenbuhl, the UNRWA head. Jordan will call for an Arab League meeting to lobby for donors to cover the $200 million shortfall needed to shore up UNRWA, Safadi said.

UNRWA has faced a cash crisis since the United States, long its biggest donor, earlier this year slashed funding, saying the agency needed to make unspecified reforms and calling on the Palestinians to renew peace talks with Israel.

The agency was founded in 1949 after the first Arab-Israel war, in the wake of the exodus of around 700,000 refugees who fled or were driven out of Israel on its founding as a state.

UNRWA now looks after more than 5 million descendants of those original refugees, in Jordan, Lebanon, Syria and the Palestinian territories of the West Bank and Gaza Strip.

“One cannot wish 5.3 million Palestine refugees away. These are people who have rights and for many years now, for decades have faced a plight and injustice that is simply immense,” UNRWA’s Krahenbuhl said at a news conference with Safadi.

“As long as a just a lasting solution has not found of the issue of Israel-Palestine conflict we will continue to implement the mandate that the General Assembly has given us.”

The Palestinians assert the right under international law to return to homes abandoned in Israel or be compensated. Safadi said funding cuts for UNRWA undermine that right.

“The continuation of UNRWA means continued commitment by the international community to working towards a just solution of the refugees that guarantees the right of return and compensation,” Safadi said.

Safadi last week raised the plight of UNRWA with U.S. Secretary of State Mike Pompeo in Washington where officials say he warned of “dangerous consequences” to regional stability if the financial crisis were not resolved.</s>UNRWA has warned it currently only has the funds to keep its 711 schools open for the next month (AFP Photo/Jaafar ASHTIYEH)

Vienna (AFP) - Germany will provide additional funding for the UN's Palestinian refugee agency and has appealed to other EU members to do the same following a cut in US aid, its foreign ministry said Friday.

The United Nations Relief and Works Agency for Palestine Refugees (UNRWA) has been struggling to balance its books since the United States announced in January it was cutting its annual funding by $300 million (260 million euros).

German Foreign Minister Heiko Maas said in a letter to European Union colleagues that the agency was a "key factor for stability" in the Middle East whose breakdown could entail an "uncontrollable chain reaction".

Maas did not say how much money Germany would give in addition to 81 million euros it has already provided so far this year, but appealed to the EU to jointly support the agency to make up the deficit.

The foreign ministry confirmed the content of the letter.

UNRWA director Pierre Krahenbuhl said Thursday that the agency needs $200 million to continue its work until the end of this year.

The agency supports some five million registered Palestinian refugees and provides schooling for 526,000 children in the Palestinian territories, Lebanon, Syria and Jordan.

But UNRWA has warned it currently only has the funds to keep its 711 schools open for the next month.

Jordan's foreign minister said Thursday that his country would host a fundraiser at the United Nations headquarters in New York on September 27 on the sidelines of the UN General Assembly to keep the agency afloat.</s>The United Nations Relief and Works Agency for Palestine Refugees (UNRWA) has been struggling to balance its books since the United States announced in January it was cutting its annual funding by $300 million (260 million euros).

German Foreign Minister Heiko Maas said in a letter to European Union colleagues that the agency was a "key factor for stability" in the Middle East whose breakdown could entail an "uncontrollable chain reaction".

Maas did not say how much money Germany would give in addition to 81 million euros it has already provided so far this year, but appealed to the EU to jointly support the agency to make up the deficit.

The foreign ministry confirmed the content of the letter.

UNRWA director Pierre Krahenbuhl said Thursday that the agency needs $200 million to continue its work until the end of this year.

The agency supports some five million registered Palestinian refugees and provides schooling for 526,000 children in the Palestinian territories, Lebanon, Syria and Jordan.

But UNRWA has warned it currently only has the funds to keep its 711 schools open for the next month.

Jordan's foreign minister said Thursday that his country would host a fundraiser at the United Nations headquarters in New York on September 27 on the sidelines of the UN General Assembly to keep the agency afloat.</s>U.S. Ends Funding Of UN Agency That Supports Palestinian Refugees

The Trump administration announced on Friday it would cease all funding of an agency that provides services to more than 5 million Palestinian refugees. It is a reversal of years of U.S. policy on a core issue of the Israeli-Palestinian conflict.

"The United States will no longer commit further funding to this irredeemably flawed operation," State Department spokeswoman, Heather Nauert said in a statement.

In previous years the U.S. has provided more than $350 million — about a third of the annual budget of the United Nations Relief and Works Agency. The organization uses the funds to run schools and clinics for Palestinian refugees in occupied territories — the West Bank and Gaza — as well as those in Jordan, Syria and Lebanon.

The White House's withdrawal of support has been expected for some time; It had suspended most of the aid in January after making a $60 million contribution. At the time officials said the department was reassessing future aid, and called on other countries to take on greater financial responsibility.

"We made it clear that the United States was no longer willing to shoulder the very disproportionate share of the burden of UNRWA's costs that we had assumed for many years," Nauert said in the statement.

In recent months, neighboring Arab and European countries have pledged to protect the aid organization. Just hours before the State Department announcement on Friday, Germany agreed to significantly boost funding, the AP reported.

The Times of Israel reported that "Jordan said Thursday it would host a fundraiser at the United Nations headquarters in New York next month to keep UNRWA afloat."

But international efforts appear to have done little to assuage the Trump administration's concerns over the UN agency's fundamental business model, which it called "simply unsustainable" and described as being in "crisis mode for many years.

Palestinians have accused the White House of using the agency — and the welfare of refugees — as a bargaining chip to pressure Palestinian leadership into a U.S.-brokered peace deal with Israel. Palestinian leaders have cut contact with the U.S. since the Trump administration backed Israel's claim of Jerusalem as its capital. Palestinians want part of the city for a capital for their future state.

Aaron David Miller, a former U.S. negotiator in Mideast peace talks, warned on Twitter that the cuts could lead to instability, and end up costing Israel.

"Defunding UNWRA — whatever its flaws — is a mistake," Miller wrote. "It will harm Israeli security; create openings for Hamas on the West Bank; and create a situation in which Israel will be stuck — one way or the other — with the check."

The State Department did not address concerns that the U.S. may try to pressure the United Nations into reducing the number of Palestinians given refugee status. But Nauert said the U.S. is concerned about the impact of its funding cuts on quote "innocent Palestinians" — and suggested it may give direct aid instead.

"The United States will intensify dialogue with the United Nations, host governments, and international stakeholders about new models and new approaches," she said in the statement.</s>The UN Palestinian refugee agency (UNRWA) has called the decision by the Trump administration to no longer commit funding "deeply regrettable" and "shocking".

Chris Gunness, spokesperson for the United Nations Relief Works and Agency (UNRWA), said on Saturday Friday's move would affect "millions of people" including "some of the most disadvantaged and marginalised on this planet".

For nearly 70 years, UNRWA has provided lifesaving assistance to more than five million Palestinian refugees in the occupied territories, as well as Lebanon, Syria and Jordan.

But over the past year, the US government has made it increasingly clear it considers the work the organisation does, and who it considers as refugees, to be an obstacle in the protracted Palestinian-Israeli conflict.

In January, a month after President Donald Trump sparked widespread international condemnation by recognising Jerusalem as Israel's capital, the White House decided to cut $65m in aid to UNRWA.

It was later reported that the Trump administration had withheld about $305m in funding, and only delivered $60m to UNRWA.

UNRWA told Al Jazeera it spent the next eight months scrambling for financial assistance, and was only able to continue operating after large contributions were raised by Qatar, the United Arab Emirates and Saudi Arabia, which donated $150m between them.

The US decision to stop all funding to the UN agency, which it called an "irredeemably flawed operation", was quickly criticised by the Palestinian leadership.

A spokesperson for UN Secretary-General Antonio Guterres also pushed back against claims that the agency was inefficient.

"UNRWA has a strong record of providing high-quality education, health and other essential services, often in extremely difficult circumstances," a statement by Stephane Dujarric read.

"The secretary-general calls on other countries to help fill the remaining financial gap, so that UNRWA can continue to provide this vital assistance, as well as a sense of hope this vulnerable population."

Originally established as a temporary solution, UNRWA was set up after the creation of Israel in 1948 to assist the more than 700,000 Palestinians who were forcibly expelled from their towns and villages.

Since then, it has helped four generations of Palestinians with basic needs, including housing, healthcare, education and social services.

Employing more than 30,000 staff, it mostly works in education, and operates closely with local government bodies.

It helps more than half of the Gaza Strip's two million population, a region which has been devastated by more than 10 years of blockade.

According to UNRWA, the Strip suffers from a 44 percent unemployment rate.

Gunness, the agency's spokesman, told Al Jazeera that if UNRWA didn't receive emergency cash injection in the next 30 days, when its funds are expected to run dry, a "doomsday scenario" could unfold.

"Let there be no mistake; this decision is likely to have a devastating impact on the lives of 526,000 children who receive a daily education from UNRWA; 3.5 million sick people who come to our clinics for medical care; 1.7 million food insecure people who receive assistance from us, and tens of thousands of vulnerable women, children and disabled refugees who come to us.

"If we don't fill a funding gap of $217m very quickly, they are all likely to suffer".

What programmes does it offer?

According to UNRWA, the US provided $364m to the agency last year. Other member states donated $650m.

The funds helped provide for basic commodities such as flour, rice, sugar, powdered milk, canned meats, pharmaceuticals and drugs, as well as general supplies such as school textbooks and equipment.

Mohammad Oweis, a Washington, DC-based political analyst and researcher, who specialises in the Middle East, said the agency helped people such as himself go on to live a better life.

"I was born in a tent in a refugee camp. I was raised in camp. Without the help of UNRWA, I would not have had clothes, food or schooling," he said.

Why is funding being cut?

Key to the Trump administration and Israel's criticism of UNRWA is the way the agency counts the refugees - its total includes the decendants of refugees who were originally displaced by the creation of Israel.

Israel fears that the passing of refugee status from parents to children could threaten the country's so-called "Jewish character, as Palestinians claim the right of return to their ancestral homeland.

Earlier this year, Israeli Prime Minister Benjamin Netanyahu called for UNRWA to be scrapped and accused the agency of helping "fictitious refugees".

"UNRWA is an organisation that perpetuates the Palestinian refugee problem and the narrative of the right-of-return, as it were, in order to eliminate the State of Israel," Netanyahu said.

His comments were echoed earlier this week by Nikki Haley, the US ambassador to the UN, who accused the agency of exaggerating the number of Palestinian refugees it currently provides aid to, amid reports Washington is planning to cap the number it officially recognises as refugees at only 500,000.

"We will be a donor if it [UNRWA] reforms what it does ... if they actually change the number of refugees to an accurate account, we will look back at partnering them," Haley said.

By undermining UNRWA's definition of refugees, the administration appears to be attacking the Palestinian belief in the "right of return".

Mustafa Barghouti, a former Palestinian information minister and secretary general of the Palestinian National Initiative, said the decision to end funding was "not just an economic act, but also a political on".

"The US tried to liquidate the issue of Jerusalem by saying they were removing it from the negotiating table, now they want to kill UNRWA with the aim of killing the right of the Palestinian refugees to return to their homeland.

"These are actions aimed at liquidating the Palestinian issue completely while trying to normalise relations between Israel and Arab countries.

"This will fail and what the Americans have done will make us more determined to stick to the rights of Palestinian refugees, especially after their nationalistic law, which is nothing but a system of apartheid".

Sam Bahour, a co-founder of the Right to Enter campaign, which highlights Israeli restrictions on Palestinian movement, agreed, adding that the end of funding would awaken the Palestinian community.

"They are trying to force down Palestinians throats this idea that they will no longer return home, and this is something the Palestinians have historically refused to accept."

In emails leaked to Foreign Policy magazine last month, Trump's son-in-law and senior adviser Jared Kushner described the agency as not conducive to "peace".

And during his visit to Jordan last June, he reportedly pushed for the refugee status of the two million Palestinians registered in the country to be dissolved.

What will the cut mean for ordinary Palestinians?

With the UN struggling to grapple with a host of international crises, the shortfall could have disastrous consequences for the five million Palestinian refugees.

According to Gunness, the $217m shortfall means that by the end of the month "UNRWA will be running on empty and won't have enough money to pay for for its 22,000 teaching staff".

"After September we wont have enough money to run our schools, health clinics and our relief and social services programmes," he said. "We are working tirelessly to avoid that."

Is anyone stepping in?

UNRWA's planned budget for 2018 was over $1bn. So far, Gulf states, Norway, Turkey and Canada have stepped in with pledges of $238m to help meet the budget deficit.

Gunness said it was "remarkable" the agency had managed to raise so much in the past eight months, adding it had a "long way to go," as these pledges still needed to be paid out.

"We have been very generously supported by over 20 major donors and were looking for money from all of them and also from new donors," he said.

On Friday, Jordan's Foreign Minister, Ayman Safadi said Amman would host a fund-raising at the UN headquarters later in September with the aim to "close the gap and put in place a plan that will ensure UNRWA's continued, ongoing funding for the coming years".

Meanwhile, Heiko Maas, the German foreign minister, said Berlin had pledged to significantly increase its future contributions, from roughly $94 million this year to an unspecified larger amount.

The Reuters news agency quoted him as saying that "the loss of [UNRWA] could unleash an uncontrollable chain reaction".

How have the Palestinian Authority and Hamas responded?

Senior members of the Palestinian Authority denounced the US decision and said it violated international law.

Prime Minister Rami Hamdallah tweeted: "We reject the US administration's decision to stop its funding of UNRWA in its latest blatant aggression against the rights of the Palestinian people, international law and UN General Assembly resolution 302 of 1949, which specified that the UN agency was established to provide its services in all areas until the refugee issue is resolved".

Palestinian Authority Foreign Minister Ryad al-Maliki said: "We will challenge the Trump decision & UNRWA is here to stay as long as there is one Palestinian refugee left."

Saeb Erekat, the secretary-general of the Palestinian Liberation Organization, said the pro-Israel bias of Trump's administration has disqualified it from any role in the peace process.

"By cutting aid, the US is violating international law. UNRWA is not a Palestinian agency but was established by the United Nations, and there is an international obligation to assist and support it until all the problems of the Palestinian refugees are solved."

Meanwhile,Sami Abu Zuhri, a senior official of Hamas, which administers the Gaza Strip, tweeted: "The US decision to cancel aid to UNRWA aims to remove the right of return and represents a serious American escalation against the Palestinian people. The decision reflects the Zionist background of the American leadership that has become an enemy of our people and our Muslim nation as a whole.

"We insist that we will not succumb to such unjust decisions".</s>The United States on Friday halted all funding to a U.N. agency that helps Palestinian refugees in a decision further heightening tensions between the Palestinian leadership and the Trump administration.

A spokesman for Palestinian President Mahmoud Abbas denounced the decision as “a flagrant assault against the Palestinian people and a defiance of U.N. resolutions.”

State Department spokeswoman Heather Nauert said the business model and fiscal practices of the United Nations Relief and Works Agency (UNRWA) made it an “irredeemably flawed operation.”

“The administration has carefully reviewed the issue and determined that the United States will not make additional contributions to UNRWA,” she said in a statement.

Nauert said the agency’s “endlessly and exponentially expanding community of entitled beneficiaries is simply unsustainable and has been in crisis mode for many years.”

The latest announcement comes a week after the administration said it would redirect $200 million in Palestinian economic support funds for programs in the West Bank and Gaza.

UNRWA spokesman Chris Gunness voiced the agency’s “deep regret and disappointment” at the decision, which he said was surprising given that a December U.S. funding agreement had acknowledged UNRWA’s successful management.

“We reject in the strongest possible terms the criticism that UNRWA’s schools, health centers, and emergency assistance programs are ‘irredeemably flawed,'” Gunness added in a series of Twitter posts.

The 68-year-old agency says it provides services to about 5 million Palestinian refugees in Jordan, Lebanon, Syria and the West Bank and Gaza. Most are descendants of people who were driven out of their homes or fled the fighting in the 1948 war that led to Israel’s creation.

U.S. President Donald Trump and his aides say they want to improve the Palestinians’ plight, as well as start negotiations on an Israeli-Palestinian peace agreement.

But under Trump, Washington has taken a number of actions that have alienated the Palestinians, including the recognition of Jerusalem as Israel’s capital. That move was a reversal of longtime U.S. policy and led the Palestinian leadership to boycott the Washington peace efforts being led by Jared Kushner, Trump’s senior adviser and son-in-law.

The United States paid out $60 million to UNRWA in January, withholding another $65 million, from a promised $365 million for the year.

“Such a punishment will not succeed to change the fact that the United States no longer has a role in the region and that it is not a part of the solution,” Abbas spokesman Nabil Abu Rdainah told Reuters.

He said “neither the United States nor anybody else will be able to dissolve” UNRWA.

In Gaza, the Islamist group Hamas condemned the U.S move as a “grave escalation against the Palestinian people.”

“The American decision aims to wipe out the right of return and is a grave U.S escalation against the Palestinian people,” said Hamas spokesman Sami Abu Zuhri.

He told Reuters the “U.S leadership has become an enemy of our people and of our nation and we will not surrender before such unjust decisions.”

Earlier on Friday, German Foreign Minister Heiko Maas said Germany would increase its contributions to UNRWA because the funding crisis was fueling uncertainty. “The loss of this organization could unleash an uncontrollable chain reaction,” Maas said.

UNRWA has faced a cash crisis since the United States, long its biggest donor, slashed funding earlier this year, saying the agency needed to make unspecified reforms and calling on the Palestinians to renew peace talks with Israel.

The last Palestinian-Israeli peace talks collapsed in 2014, partly because of Israel’s opposition to an attempted unity pact between the Fatah and Hamas Palestinian factions and Israeli settlement building on occupied land that Palestinians seek for a state.

Nauert said the United States would intensify talks with the United Nations, the region’s governments and international stakeholders that could involve bilateral U.S. assistance for Palestinian children.

“We are very mindful of and deeply concerned regarding the impact upon innocent Palestinians, especially school children, of the failure of UNRWA and key members of the regional and international donor community to reform and reset the UNRWA way of doing business,” she said.

Gunness told Reuters earlier in August that UNRWA’s support would be needed as long as the parties failed to reach an agreement to end the crisis.

“UNRWA does not perpetuate the conflict, the conflict perpetuates UNRWA,” he said. “It is the failure of the political parties to resolve the refugee situation which perpetuates the continued existence of UNRWA.”</s>Palestinian refugees reacted with dismay on Saturday to a United States decision to halt funding to a UN agency, warning that it would lead to more poverty, anger and instability in the Middle East.

The US announcement on Friday that it will no longer support the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) has deepened a cash crisis at the agency, and heightened tensions with the Palestinian leadership.

The 68-year-old UNRWA provides services to about 5 million Palestinian refugees across Jordan, Lebanon, Syria and the West Bank and Gaza. Most are descendants of the roughly 700,000 Palestinians who were driven out of their homes or fled the fighting in the 1948 war that led to Israel’s creation.

In Gaza, Nashat Abu El-Oun, a refugee and father of eight, said: “The situation is bad and it will become worse … People can hardly afford living these days and if they became unable to earn their living they will begin thinking of unlawful things.”

State Department spokeswoman Heather Nauert said on Friday that UNRWA’s business model and fiscal practices were an “irredeemably flawed operation” and that the agency’s “endlessly and exponentially expanding community of entitled beneficiaries is simply unsustainable.”

UNRWA rejected the criticisms, with spokesman Chris Gunness describing it as “a force for regional stability.”

Speaking in Jordan, where more than 2 million registered Palestinian refugees live, including 370,000 in 10 refugee camps, Gunness said: “It is a deeply regrettable decision … some of the most disadvantaged, marginalised and vulnerable people on this planet are likely to suffer.”

US cancels more than US$200 million in aid to Palestinians

Gunness said UNRWA provides health clinics, schooling for 526,000 refugee children across Jordan, Syria, Lebanon, Gaza and the West Bank, including East Jerusalem, and food help to 1.7 million people – a million of them in Gaza. The agency, which has a funding gap of US$217 million, will now ask donors for more and seek new sources of income, he said.

The United States, by far UNRWA’s biggest donor, slashed funding earlier this year, paying out only US$60 million of a first instalment in January, and withholding US$65 million. It had promised US$365 million for the whole year.

Washington said the agency needed to make unspecified reforms and called on the Palestinians to renew peace talks with Israel.

The last Palestinian-Israeli peace talks collapsed in 2014, partly because of Israel’s opposition to an attempted unity pact between the Fatah and Hamas Palestinian factions and to Israeli settlement building on occupied land that Palestinians seek for a state.

Israeli Intelligence Minister Israel Katz said the U.S.’s decision represented a “realistic view of the situation and supports Israel’s position.”

UNRWA is “the body that enshrines the Palestinian refugee problem,” he wrote on Twitter.

“We already have great-great-grandchildren of refugees who are not refugees,” he said in January. “I suggest a gradual conversion of all funds going to UNRWA to other agencies.”

On Friday, before the US decision was confirmed, the head of the international UN refugee agency UNHCR, Filippo Grandi, was asked if his agency could assume UNRWA’s role.

Palestinians hurting their own cause in demanding right to return

“The Palestinian refugees in the region are the responsibility of UNRWA,” he said, making no further comment.

The UNRWA move is the latest in a number of actions by the Trump administration that have alienated the Palestinians, including the recognition of Jerusalem as Israel’s capital and moving the US Embassy from Tel Aviv to Jerusalem.

That move was a reversal of long-time US policy and led Palestinian leadership to boycott the Washington peace efforts led by Jared Kushner, Trump’s senior adviser and son-in-law.

Palestinian chief negotiator Saeb Erekat accused Washington of implementing the agenda of “Israeli extremists who have done nothing but to destroy the prospect of peace.”

Speaking in Ramallah, he said: “The United States may have the right to say that we don’t want to give taxpayers’ money, but who gave the US the right to approve the stealing of my land, my future, my aspirations, my capital, my Aqsa Mosque, my Holy Sepulchre Church?”

In Jalazone refugee camp near Ramallah in the Israeli-occupied West Bank, Ayoub Abeidi, whose family once lived in what is now the city of Lod in Israel, said the decision was political.

“Trump wants to finish off UNRWA so he can terminate the right of refugees (to return),” said Abeidi, 53. “Our right to return exists and neither Trump nor anybody else can cancel it.”

Successive Israeli government have ruled out any right of return, fearing the country would lose its Jewish majority.</s>WASHINGTON (WASHINGTON POST) - The Trump administration has decided to cancel all US funding of the United Nations aid programme for Palestinian refugees, part of its determination to put its money where its policy is as it seeks a recalculation of US foreign aid spending and prepares its own Israeli-Palestinian peace plan.

In an announcement to be made within the next several weeks, the administration plans to voice its disapproval of the way the UN Relief and Works Agency, or UNRWA, spends the funds and to call for a sharp reduction in the number of Palestinians recognised as refugees, dropping it from more than five million, including descendants, to fewer than a tenth of that number or less, comprised of those still alive from when the agency was created seven decades ago, according to officials familiar with the decision.

Any such reduction would effectively eliminate, for most Palestinians, the "right of return" to land contested with Israel.

More immediately, many regional foreign policy and security experts, including in Israel, say that slashing UNRWA's budget, amid a call to "de-register" refugees, would worsen an already disastrous humanitarian situation, especially in Gaza, and sharply increase the level of violence.

In addition to contributions to UNRWA, the United States has provided direct, bilateral assistance to the West Bank and Gaza. Last week, the State Department announced that more than US$200 million (S$273 million) in already-appropriated aid for this year would be "redirected" elsewhere.

The cuts in funding, along with shifts in policy, including recognition of Jerusalem as Israel's capital, are part of a major reshaping of Middle East policy under President Donald Trump.

While few in the region believe that right of return could ever be fully exercised, it has long been considered a core issue to be negotiated in any peace agreement.

The administration cannot unilaterally change UN rules for who is considered a refugee eligible for UNRWA aid - which now includes descendants of those originally ousted from their land and homes.

The UN General Assembly, in which there is great sympathy for the Palestinians, has reapproved UNRWA's mandate and terms by a massive majority every three years since it created the agency in 1949, one year after the creation of the state of Israel.

The administration's response, according to officials who spoke on the condition of anonymity to discuss the sensitive issue, is that if the United Nations wants the money, it needs to change UNRWA's rules and the way it operates.

The administration objects to many things about UNRWA beyond the definition of a refugee.

"First of all, you're looking at the fact that, yes, there's an endless number of refugees that continue to get assistance, but more importantly, the Palestinians continue to bash America," Nikki Haley, the US ambassador to the United Nations, said Tuesday in remarks at the Washington, D.C.-based Foundation for Defense of Democracies.

Officials of the governing Palestinian Authority, Haley said, "have their hand out wanting UNRWA money," which pays for schools and essential services for Palestinians in the West Bank and Gaza, as well as in Jordan, Syria and Lebanon.

The administration also wants countries in the region who carry the banner of Palestinian rights to pay.

"Where is Saudi Arabia? Where is the United Arab Emirates? Where is Kuwait?" Haley said. "Do they not care enough about Palestinians to go and give money to make sure these kids are taken care of?"

Although Europeans and Arab countries also contribute substantial amounts, the United States has long been the largest individual donor to UNRWA, pledging about one third of the agency's US$1.1 billion in 2017 budgetary and emergency contributions. Early this year, the administration cut a scheduled UNRWA payment of US$130 million in half to US$65 million. Under the new decision, that will be the last donation.

The United States currently provides nearly US$4 billion in mostly military annual aid to Israel.

As it readies its peace plan, now 18 months in the making with no release date in sight, the White House is seeking to take the right of return off the table, as Trump has said he eliminated the future of the contested city of Jerusalem from negotiations late last year when he recognised it as the capital of Israel.

Ever since the Jerusalem decision, the Palestinian Authority led by President Mahmoud Abbas has refused to meet with White House aides Jared Kushner and Jason Greenblatt and others working on the plan.

While they have released no details, US officials have indicated it is likely to include infusions of development aid, particularly to Hamas-controlled Gaza.

The goal, officials have said, is both to woo Palestinians away from Hamas, by appealing to their desire for better lives amid seemingly endless strife and deprivation under terrorist leaders, and to make it more difficult for Abbas, a Hamas rival, to continue to rebuff U.S. overtures.

On Monday, as reports of an upcoming decision on UNRWA circulated, Abbas's office released a statement accusing the administration of "stripping millions of Palestinians of their refugee status."

Foreign Policy first reported a US decision to end UNRWA funding on Tuesday. "After using humanitarian aid to blackmail and pressure the Palestinian leadership to submit to the empty plan known as 'the deal of the century,' the Trump administration plans to commit an immoral scandal against Palestinian refugees by giving itself the right to abolish (their) historical rights," Abbas spokesman Ahmad Shami said.

In Israel, reports about UNRWA and refugee definitions have sparked a sharp debate between those who would like to see an end to the agency - which they say perpetuates a myth that Palestinians and their descendants might one day return to the land they have lost since Israel's creation - and those who say UNRWA's demise will bring the collapse of the Palestinian Authority, fueling Hamas and other extremist elements.

Israel's official position is that there is no right of return and that such a notion would lead to the eventual demise of the Jewish state. Prime Minister Benjamin Netanyahu has said repeatedly that UNRWA perpetuates the problem instead of trying to solve it, and has suggested that UNRWA could gradually be incorporated into the main UN refugee organisation, the United Nations High Commissioner for Refugees.

UNHCR, Netanyahu said, has "clear criteria for supporting genuine refugees, not fictitious refugees as happens today under UNRWA."
Ahead of an expected U.S. announcement that it will cut all aid to the UNRWA, which supports more than 5 million registered Palestinian refugees, Germany calls on European Union states to help bridge the expected US$217 million deficit. Yesterday, Jordan made a similar appeal to the Arab League.