U.S. to End All Funding to U.N. Agency That Aids Palestinian Refugees

Months after scaling back financial support for the United Nations agency that provides humanitarian aid to more than 5 million Palestinian refugees, the Trump administration has decided to end funding altogether, several sources told Foreign Policy, in a decision that analysts said would cause more hardship and possibly unrest in Gaza, the West Bank, and other parts of the Middle East.

The decision was made at a meeting earlier this month between President Donald Trump’s advisor and son-in-law, Jared Kushner, and Secretary of State Mike Pompeo, according to the sources. The administration has informed key regional governments in recent weeks of its plan.

The United States had been providing the U.N. Relief and Works Agency for Palestine Refugees in the Near East, or UNRWA, some $350 million a year—more than any other country. The sum amounted to more than a quarter of the agency’s $1.2 billion annual budget.

Dave Harden, a former U.S. Agency for International Development official briefed on the meeting between Kushner and Pompeo, said the decision would potentially benefit hard-liners in the region, including the Palestinian Islamic group Hamas.

“An immediate and capricious cut off of UNRWA funding … risks collapsing the Palestinian Authority, empowering Hamas, and shifting the responsibility of health, education, and ultimately security services to the Israelis,” Harden told FP.

“The decision is dangerous, with unpredictable consequences.”

A State Department spokesperson declined to comment on the meeting but said that “U.S. policy regarding UNRWA has been under frequent evaluation and internal discussion.”

The decision underscored the influence of Kushner and Nikki Haley, the U.S. ambassador to the U.N., who have overcome resistance to the cuts from the Pentagon, the U.S. intelligence community, and the State Department under the leadership of former Secretary of State Rex Tillerson. Opponents of the steep cuts fear the U.S. retreat would stoke instability in the region.

Kushner contends that UNRWA’s assistance has built a culture of dependency among the Palestinians and that it helps preserve unrealistic expectations that they might one day return to the homes they left in the 1948 Arab-Israeli War.

He and Haley are gambling that the financial pressure will force the Palestinians to resume negotiations with Washington’s Middle East peace team, which Palestinian Authority President Mahmoud Abbas halted over Trump’s decision last year to move the U.S. Embassy in Israel to Jerusalem.

They also believe it will compel other countries, particularly wealthy Arab sheikdoms in the Persian Gulf, to increase their financial support for UNRWA.

The administration is also cutting other forms of aid to the Palestinians, including $200 million to U.S. charities that provide needy Palestinians in Gaza and the West Bank with medical assistance and other humanitarian services, officials announced last week. Those funds will be redirected to other humanitarian crises.

“The U.S. Administration’s decision will deepen the humanitarian crisis in Gaza,” Andy Dwonch, Mercy Corps’s mission director for Palestine, said in a statement issued Monday. Mercy Corps is one of the charities that will lose funding as a result of last week’s announcement.

“The unconscionable decision to suspend assistance contradicts U.S. values and undermines U.S. goals of a peaceful, secure, and prosperous region.”

The plan to cut U.S. funding has been championed by Israeli Prime Minister Benjamin Netanyahu, but military officials cautioned Israeli Cabinet members over the weekend that a swift demise of UNRWA in Gaza could create a vacuum that Hamas would fill, Haaretz reported.

Peter Lerner, a retired Israeli lieutenant colonel who served for years as a spokesman for the Israeli military, said he was particularly worried by a report that the White House is considering curtailing UNRWA’s operations in the West Bank, where Israeli and Palestinian security forces have worked together to prevent attacks on Israelis.

“[UNRWA] keeps people off the street, employed, and provides social services,” he said.

The development also marks a blow to Jordan, a key U.S. ally that hosts nearly 2.9 million refugees, including 600,000 Syrians displaced by war in their country.

Kushner had proposed redirecting UNRWA funds to the Jordanian government to help defray the cost of caring for its Palestinians if Amman would agree to fully naturalize them and accept the fact that they would not be granted a right of return to Israel. Jordan rebuffed the proposal.

Jordan’s foreign minister, Ayman Safadi, met last week with Pompeo and Jason Greenblatt, the White House special envoy for Middle East peace, to advocate for continued funding of UNRWA.

Following the meeting, Safadi said on Twitter that he had underscored the urgency of supporting UNRWA and stressed the “dangerous consequences of failing to bridge #UNRWA deficit.”

UNRWA was established in 1949 to provide relief and protection for more than 700,000 Palestinians displaced from what is now Israel during the Arab-Israeli War. But the relief agency, which now runs schools and provides health and other social services to more than 5 million refugees in Gaza, the West Bank, Jordan, Lebanon and Syria, has faced increasing criticism from Israel, the White House, and pro-Israel lawmakers.

In January, the United States slashed its first $125 million installment to UNRWA, leaving the organization with $60 million. At the time, the State Department left open the possibility that the United States might restore funding to UNRWA. State Department spokeswoman Heather Nauert said then that the decision to withhold funds was meant to encourage reforms within UNRWA and pressure other countries to cover more of the agency’s budget.

Pierre Krähenbühl, UNRWA’s commissioner-general, told FP last week that his agency has raised more than $238 million from other countries, including wealthy Persian Gulf nations, in an effort to fill the gap. But the agency is facing a shortfall of more than $200 million.

“It’s a very unstable phase for us,” he said.