The European Union will add 40 million euros to its current financing of UNRWA, the UN agency for Palestinian refugees and their descendants, EU foreign policy chief Federica Mogherini announced Thursday.
"We will continue to invest in that because we think this is a key, not only humanitarian duty, but also investment in the two state solution," Mogherini said in a statement.
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Schools and health centers are at risk if it is unable to plug a $185 million funding gap needed to keep operating until the end of the year, the agency's head said on Monday.
"Currently we have money in the bank ... will last I presume somewhere into ... mid October," said Pierre Krahenbuhl, Commissioner-General of the United Nations Relief and Works Agency.
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"But it's clear that we still need approximately $185 million to be able to ensure that all of our services, education system, health care, relief and social services and our emergency work in Syria and Gaza in particular can continue until the end of the year," Krahenbuhl said.
The United States last month announced a halt in its aid to UNRWA, calling it an "irredeemably flawed operation," a decision that further heightened tensions between the Palestinian leadership and the Trump administration.
UNRWA provides services to about 5 million Palestinian refugees across Jordan, Lebanon, Syria and the West Bank and Gaza. Most are descendants of some 700,000 Palestinians who were driven out of their homes or fled fighting in the 1948 war that led to Israel's creation.
The growing refugee count was cited by Washington, UNRWA's biggest donor, in its decision to withhold funding.
On Thursday, representatives from United Nations, the United States, the European Union, Israel and the Palestinians were to finalize an aid package tailored specifically for the Gaza Strip. The aid package will mainly focus on the reconstruction of Gaza's electricity and water infrastructures.
Negotiations surrounding the aid package were led over the past year by the UN's special Middle East envoy, Nickolay Mladenov, who who stated in his report that Gaza's unemployment rate stands at 35 percent and points at American aid cuts to the budget of UNRWA as a factor that contributed to this deterioration. He received the green light from Israel and the Palestinians to go ahead with the initative on Thursday.
According to Israeli sources involved in the matter, the breakthrough was achieved when the Palestinian Authority agreed not to slap sanctions on Gaza if the aid package does indeed get passed on to the Strip.
Reuters contributed to this report