Netanyahu Supports Gradual Cut in Funding to UN Palestinian Refugee Agency, Senior Israeli Official Says

'Our understanding is that no decision has been made on the question of American funding to UNRWA,' says UN agency responsible for aiding Palestinian refugees

A Palestinian man in Khan Younis refugee camp in the southern Gaza Strip, January 3, 2018.
IBRAHEEM ABU MUSTAFA/REUTERS

Prime Minister Benjamin Netanyahu supports a gradual cutback of American funding to the United Nations Relief and Work Agency for Palestinian refugees, a senior Israeli official said on Saturday.

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Netanyahu’s bureau over the weekend said that the prime minister “supports a critical approach by President Trump and believes that practical steps must be taken to change the situation in which UNRWA perpetuates the Palestinian refugee problem instead of resolving it.”

The Israeli official’s statement comes after U.S. President Donald Trump and his envoy to the United Nations, Nikki Haley, said that the United States would cut aid to the Palestinians if they did not return to the negotiating table. A meeting took place at the White House on Friday to examine possibilities for cutbacks, but the discussion ended with no immediate decisions and further meetings are expected.

>> Trump's threat to defund UNRWA could cost Israel as much as the Palestinians | Analysis ■ Less American aid to Palestinians means more violence against Israelis | Opinion ■ Explained: What is the UN agency for Palestinian refugees? 

Over the weekend, sources in the administration denied reports that the year's first payment to UNRWA had been frozen. “We are examining our funding to the Palestinians in light of their recent conduct and in continuation of the president’s stance on the issue,” a senior administration official told Haaretz.

UNRWA has not received information from the United States about a funding freeze, but only a general statement that funding “is now under review in light of the president’s statements.” According to UNRWA officials, the first payment of each new year is usually received during the first two weeks of January; only in the third week of the month will UNWRA definitively know if funding has been delayed.

On Tuesday, Trump tweeted that the United States gives the Palestinians “hundred [sic] of millions of dollars and get no appreciation or respect.” In two tweets, Trump wondered why the United States should continue to support the Palestinian Authority in the absence of a peace process with Israel. The president added that Israel “would have had to pay much more” for U.S. recognition of Jerusalem as its capital, but the Palestinians refuse to negotiate.

Some hours earlier, Ambassador Haley said that Trump wanted to stop U.S. support for the Palestinians until they returned to the negotiating table. Haley made the statements in response to a question as to whether the United States intended to cut back its support for UNRWA.

Israel has called to close down the agency in the past, claiming that it makes it possible for Arab countries to avoid taking in and absorbing Palestinian refugees and their descendants. In June, Netanyahu called on Haley to reexamine UNRWA’s existence, saying that the organization "perpetuates the Palestinian refugee problem" rather than resolving it and it should thus be dismantled and incorporated in other UN commissions.

However, in July, the Trump administration said it was willing to continue transferring funding to UNRWA as part of its commitment to the Israel-Palestinian peace process. 

The United States gives over $300 million a year to UNRWA, which constitutes one third of the agency’s budget. According to diplomats familiar with discussions on the matter, it is now mainly Haley who supports Netanyahu's suggestion, in keeping with the policy of penalties she declared after the vote in the UN General Assembly against American recognition of Jerusalem as Israel’s capital. However, other administration officials believe that cutting funding to UNRWA, whose main work is in the Gaza Strip, would not necessarily influence senior PA officials in Ramallah to renew talks with Israel.

Another possibility is a cutback in other U.S. assistance for humanitarian and development projects in the West Bank through the United States Agency for International Development. According to a congressional report, in 2017, some $330 million were given to USAID projects of this kind. This money has been at risk of being cut back for a few months due to legislation now moving through Congress against the PA policy of paying salaries to convicted terrorists in prison in Israel.

The bill, known as the Taylor Force Act (after an American citizen who was stabbed to death in a terror attack in Tel Aviv in 2016), is meant to cut part of the funding for projects in the West Bank, excluding health and water projects.

The Trump administration also separately transfers around $30 million to the PA security forces, who are being trained by U.S. Army officers in coordination with the Israel Defense Forces and Shin Bet security service. The U.S. defense and intelligence departments are expected to come out against cutting this funding.

“Based on extensive conversations with interlocutors in the U.S. Administration, our understanding is that no decision has been made on the question of American funding to UNRWA,” stated Chris Gunness, the UNRWA spokesman.

“The United States has been our largest single donor over the past 70 years and remains an important strategic partner in our humanitarian mission," he added. “UNRWA will continue to work tirelessly to ensure the full implementation of  our mandate which was fully endorsed by the General Assembly, which has described our role as indispensible.”