Israel welcomed Saturday a US decision to end funding for the UN Palestinian refugee agency (UNRWA), accusing the organization which supports some 5 million Palestinians of perpetuating the Middle East conflict.

“Israel supports the US move,” an official in Prime Minister Benjamin Netanyahu’s office said on condition of anonymity.

“Consolidating the refugee status of Palestinians is one of the problems that perpetuates the conflict.”

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The Trump administration announced Friday it is cutting nearly $300 million in planned funding for the UN agency that aids Palestinian refugees, and that it would no longer fund the agency after decades of support. Instead, it said it would seek other channels by which to aid the Palestinians.

The administration castigated the UN’s Relief and Works Agency for Palestine Refugees (UNRWA) for failed practices, and indicated that it rejected the criteria by which UNRWA defines Palestinian refugees, whereby the UN agency confers refugee status not only on original refugees but on their millions of descendants.

The State Department said in a written statement that the United States “will no longer commit further funding to this irredeemably flawed operation.”

However, the statement said the US would look for other ways to aid the Palestinians.

“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,” it said, adding that “Palestinians, wherever they live, deserve better than an endlessly crisis-driven service provision model. They deserve to be able to plan for the future.”

The US will now work together with other international groups to find a better model to assist the Palestinians, the statement said.

Sources in the Israeli defense establishment are understood to fear that Washington’s apparent efforts to weaken UNRWA may strengthen the Hamas terror group in Gaza and endanger Israel’s security.

They have reportedly said that serious cuts to UNRWA’s budget would create a vacuum in the provision of basic services in the Strip, where the majority of residents are dependent on the organization. This would be particularly felt in food shortages and a breakdown of education, which Hamas could use to strengthen its grip on the coastal enclave.

Yair Lapid, head of the opposition Yesh Atid party, also welcomed the decision, saying that not only is the organization “providing cover to terror,” but that it caters to “5.5 million fake refugees” and has “lost sight of its purpose.”

UNRWA, said Lapid, “perpetuates the big Palestinian lie — as if there are 5 million Palestinian refugees who have a ‘right of return’; there aren’t five million refugees and they don’t have a right of return.”

UN Secretary General Antonio Guterres, however, said the agency had his “full confidence” and called on “other countries to help fill the remaining financial gap, so that UNRWA can continue to provide this vital assistance.”

The US supplied nearly 30 percent of the total budget of the UN Relief and Works Agency, which provides health care, education, and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria, and Lebanon.

The US donated $355 million to the agency in 2016 and was set to make a similar contribution this year. In January the Trump administration released $60 million in funds but withheld a further $65 million it had been due to provide.

Ahead of Friday’s announcement, Israel had signaled its support for the move.

“Israel supports the move because UNWRA is one of the main problems perpetuating the conflict,” Hadashot news quoted Prime Minister Benjamin Netanyahu’s office as saying on Friday evening.

The “right of return” is one of the key core issues of dispute in the Israeli-Palestinian conflict. The Palestinians claim that 5 million people — tens of thousands of original refugees from what is today’s Israel, and their millions of descendants — have a “right of return.” Israel rejects the demand, saying that it represents a bid by the Palestinians to destroy Israel by weight of numbers.

It says there is no justification for UNRWA’s unique criteria, by which all subsequent generations of descendants of the original refugees are also designated as having refugee status, including those born elsewhere and/or holding citizenship elsewhere; such a designation does not apply to the world’s other refugee populations.

Israel’s population is almost 9 million, some three-quarters of whom are Jewish. An influx of millions would mean Israel could no longer be a Jewish-majority state.