TEHRAN (IQNA) – The US has reportedly cut off $125 million in funding for a UN agency that provides aid to Palestinian refugees, less than a week after US President Donald Trump threatened to hold back future aid payments to the Palestinian Authority (PA), diplomats said.

The Axios news website, citing three unnamed Western diplomats, said on Friday that the sum -- a third of the annual US donation to the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) which was expected to be delivered on Monday -- was frozen until the White House finishes its review of aid to the PA.

On Tuesday, Trump, in a number of tweets, threatened to cut Washington’s aid to Palestinians, currently worth more than $300 million a year, alleging that the PA was no longer willing to engage in the so-called peace talks with Israel.

“But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?” he said at the time.

US 'denies' freezing the aid

However, a US State Department official, speaking on condition of anonymity, told Reuters that the “(Axios) story is very misleading."

"Just because they were expecting the money on the first, and they did not get it at that time, does not mean it was suspended or canceled,” the official added.

Meanwhile, UNRWA spokesman Chris Gunness also said that his respective agency had not been “informed directly of a formal decision either way by the US administration.”

Tensions between the US and Palestinians started escalating after Trump announced last month that Washington would recognize Jerusalem al-Quds as the capital of Israel and would relocate the US embassy in Israel from Tel Aviv to the occupied city.

Palestinians condemned the decision, asserting that the US has no credibility as a Middle East peace broker.

The dramatic shift in Washington’s policy vis-à-vis the city triggered demonstrations in the occupied Palestinian territories, Iran, Turkey, Egypt, Jordan, Tunisia, Algeria, Iraq, Morocco and other Muslim countries.

On December 21, the United Nations General Assembly overwhelmingly voted in favor of a resolution that calls on the US to withdraw its controversial recognition of Jerusalem al-Quds as the Israeli capital.

Jerusalem al-Quds remains at the core of the Israeli-Palestinian conflict, with Palestinians hoping that the eastern part of the city would eventually serve as the capital of a future independent Palestinian state.

Source: Press TV