U.S. Freezes More Than Half of Aid Funds to UN Palestinian Refugee Agency

'There is a need to undertake a fundamental reexamination of UNRWA, both in the way it operates and the way it is funded,' U.S. official says

A Palestinian man rides his horse past the UNRWA relief and social program office in Gaza City on January 8, 2018.

WASHINGTON - The United States will withhold $65 million from a payment it was scheduled to transfer this month to the UN agency responsible for assisting Palestinian refugees and their descendents in the Middle East, a U.S. official said Tuesday. The U.S. will provide $60 million in aid, amounting to roughly half the planned sum of $125 million.

This payment is the first in a number of sums the U.S. is expected to give United Nations Relief and Works Agency in 2018. The PLO

A U.S. official told Haaretz that, "Without the funds we are providing today, UNRWA operations were at risk of running out of funds and closing down. The funds provided by the United States will prevent that from happening for the immediate future."

To really understand the Middle East - subscribe to Haaretz

The $65 million held by the United States awaits "future consideration" by the administration, the official added. "There is a need to undertake a fundamental reexamination of UNRWA, both in the way it operates and the way it is funded," he explained.

The Palestinians responded to the American decision, saying that it proves the U.S. administration's "complicity with the Israeli occupation by attempting to remove another permanent status issue off the table."

A statement given by Hanan Ashrawi on behalf of the PLO Executive Committee accused the U.S. administration of "following Netanyahu's instructions to gradually dismantle the one agency that was established by the international community to protect the rights of the Palestinian refugees and provide them with essential services."

She said that the aid cuts will target "the most vulnerable segment of the Palestinian people" and will only serve to deprive Palestinian refugees "of the right to education, health, shelter and a dignified life."

Earlier this month, President Trump said the U.S. may withhold future aid payments to the agency over what he called the Palestinians' unwillingness to talk peace with Israel.

The U.S. pledged $370 million to the agency in 2016, a third of the agency's budget, according to UNRWA's website.

The decision was made following a lengthy internal debate within the Trump administration. U.S. Ambassador to the UN Nikki Haley pushed for a complete freeze of funding to UNRWA, unless the Palestinians commit to U.S.-mediated peace talks with Israel, while Secretary of State Rex Tillerson and other State Department officials warned that such a move would create a humanitarian crisis in Gaza, Jordan and the West Bank.

A senior Israeli official said earlier this month that Netanyahu supports a gradual cutback of American funding to UNRWA.

The Palestinians claim that the administration is biased toward Israel's positions and has therefore refused to accept it as a mediator, calling instead for the international community to lead renewed negotiations.

Jack Khoury contributed to this report