The United Nations agency responsible for Palestinian refugees on Monday said that it planned to support half a million fewer people in 2019 because of “record low funding levels” as a result of US funding cuts.

Announcing its humanitarian response plan for next year, Jamie McGoldrick, UN humanitarian coordinator for the Palestinian territories, said UNRWA, the UN agency for Palestinian refugees, was also expecting $200m less in funding – a reduction from $550m in 2018 to $350m.

Launching the plan in Ramallah, the Palestinian Authority's seat of government, McGoldrick said the budget and the number of people targeted for aid had been reduced despite a “serious deterioration” in the humanitarian situation in the occupied Palestinian territories, and in Gaza in particular.

He said about 2.5 million people had been identified as needing humanitarian assistance, but that an “increasingly constrained operation environment” meant that UNRWA had shifted away from a “business as usual” approach to one that reflected “the current realities in which we operate”.

“In targeting 1.4 million people of these for humanitarian assistance, the Humanitarian Response Plan (HRP) is based on the maximum number of vulnerable people we believe we can realistically reach in the current non-conducive political and resource climate,” McGoldrick wrote in a foreward to the 2019 plan.

The plan said that 1.2 million of those targeted are in Gaza, and 200,000 are in the West Bank.

Founded in 1948, UNWRA was established to deal with the mass displacement of approximately 700,000 Palestinians, following the establishment of the state of Israel, to Jordan, Lebanon and Egypt.

Since then, the descendants of those Palestinians who continue to be displaced have benefited from several UNRWA initiatives, including education and healthcare. The agency has also provided employment for thousands of Palestinians in the occupied territories.

In August, a UNRWA employee in Gaza described how he had tried to set himself on fire after 125 colleagues were told that they had lost their jobs with immediate effect as a consequence of the withdrawal of US funding.

The United States, which previously contributed hundreds of millions of dollars to UNRWA, in August said that it was ending its support for the UN agency, which it described as an “irredeemably flawed operation”.

The Donald Trump administration is reported to support moves to drastically reduce the number of Palestinians recognised as refugees, from more than five million, to around a tenth of that number.

McGoldrick said that a trend of reduced funding was expected to continue in 2019, with current donors indicating that current funding levels were likely to be maintained at best.