TEL AVIV – Israeli Prime Minister Benjamin Netanyahu hailed the U.S.’s decision to cut off any further financial aid to the “refugee perpetuating” agency UNRWA, which Israeli officials have said is the Trump Administration’s first step to closing it altogether.

On Friday, the U.S. announced a $300 million cut to UNRWA, the UN’s Palestinian refugee agency, and said that going forward the U.S. would defund it altogether. Thirty percent of UNRWA’s budget is comprised of U.S. funds. The State Department said in a statement that the U.S. “will no longer commit further funding to this irredeemably flawed operation.”

Netanyahu said it was a “welcome and important change.”

He slammed the UN for perpetuating the refugee crisis instead of solving it and noted that Israel has absorbed enormous numbers of refugees throughout its history.

“Have displaced people not come to us from various countries? Holocaust survivors torn from their land?” he said. “They were uprooted, survived and came here. Did we keep them in the status of refugees? No, we absorbed them, including hundreds of thousands of Jews who left all their property behind and were uprooted from Arab countries in the [1948] War of Independence.”

“We didn’t keep them as refugees. We made them equal and contributing citizens in our state,” Netanyahu continued. “That isn’t what’s happening with the Palestinians, where 70 years ago they created a special institution: not absorbing refugees, and instead perpetuating refugees.”

“That’s why the U.S. did something very important by stopping the funding for the refugee perpetuation agency known as UNRWA,” the prime minister added. “It is finally starting to solve the problem. The funds must be taken and used to genuinely help rehabilitate the refugees, whose true number is a fraction of the number reported by UNRWA.”

“This is a very welcome and important change, and we support it,” he said.

Israel’s Foreign Ministry also issued a statement supporting the move.

“UNRWA perpetuates the myth of the eternal ‘refugee’ status of the Palestinians. The sole purpose is sustaining an illegitimate instrument aimed at the destruction of the State of Israel. UNRWA is part of the problem, not of the solution,” the ministry said in a statement posted on the Twitter page of spokesperson Emmanuel Nahshon.

According to a report by Channel 2 citing senior Israeli officials, the U.S. will demand the agency undergo drastic reform — including redefining the definition of Palestinian refugees — before it allows Arab allies to fund it.

The U.S.’s goal is to “close down UNRWA altogether,” the officials told the TV station.

Palestinian so-called refugees are the only “refugees” in the world that pass that status on to their descendants in perpetuity. One of the core issues in the conflict is the Palestinian demand for the “right of return” that would see those refugees and their descendants — who now number around 5 million — return to Israel in any final status agreement. Israel has categorically rejected this demand, deeming it a bid to destroy the Jewish state by demographics.

The U.S. is slated to release a report on the refugee question that will claim there are only half a million refugees, with 20,000 residing outside the West Bank and Gaza Strip, the TV report also said.

A range of NGOs and the governments of countries in which Palestinian refugees reside will be asked to take on the work previously done by UNRWA in education, medical aid, and food supplies, the report added.

The Palestinian Authority slammed the move.

Palestinian Authority President Mahmoud Abbas’ spokesman Nabil Abu Rudeineh said that the Palestinians would consider asking the UN General Assembly and Security Council to coerce the U.S. into reversing its decision.

He said the step was a “flagrant assault against the Palestinian people and a defiance of UN resolutions.”

UNRWA’s spokesman in the Gaza Strip, Adnan Abu Hasna, warned Saturday that the move would be a “gift to terror.”

If UNRWA in Hamas-run Gaza stops its work, he said, “what will happen if there are 300,000 school students in the streets of Gaza?” There would, he said, be “more negative energy — that’s a security danger not only for Gaza … but also for Israel. It won’t help peace; it’s a gift to terror.”

The U.S. State Department in a statement on Friday blasted the agency for perpetuating the refugee crisis.

“The fundamental business model and fiscal practices that have marked UNRWA for years — tied to UNRWA’s endlessly and exponentially expanding community of entitled beneficiaries — is simply unsustainable and has been in crisis mode for many years,” the statement said.

“We are very mindful of and deeply concerned regarding the impact upon innocent Palestinians, especially schoolchildren, 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 stated, 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.”