The United States Agency for International Development announced that half of its employees in the West Bank and Gaza will be let go in the coming weeks and by early 2019, the operations will be completely shut down.

The humanitarian agency is one of the largest and most important in the region.

The U.S. State Department informed USAID last week that by next month the agency would have to present a list of 60 percent of its employees to be dismissed as the first step in the shutdown that will be finalized by 2019.

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The U.S. federal government agency handles civilian assistance to various countries around the world. The USAID chapter in the West Bank and Gaza began operating in 1994, focusing mainly on economic issues including water, infrastructure, education and health. USAID has invested about $5.5 billion in the West Bank and Gaza in the construction of roads, schools, clinics and community centers.

USAID also buys medical equipment, provides humanitarian assistance to those in need of medical care and teaches lifesaving techniques to doctors from Gaza and the West Bank via Israel and other countries. In recent years USAID has conducted in-service education for teachers, built schools and worked on projects to keep young Palestinians in the education system.

Last August, Israel approved the entry of containers with equipment needed for the completion of water projects into Gaza. USAID had been working on for the project for past year, including construction of a large desalination plant and eight large drinking water reservoirs. The project, whose cost was estimated at 60 million shekels ($16 million) was conducted USAID by American companies through a contractor in Gaza.

After U.S. President Donald Trump’s decided to freeze funding to various Palestinian relief organizations, USAID’s dozens of projects in the West Bank and Gaza were suspended, including those that had been partially completed. In the current budgetary year, the United States was projected to have transferred a total of $250 million in aid to various Palestinian organizations. $35 million of which was supposed to be allocated to the Palestinian Authority security forces and $215 million to economic development, humanitarian assistance and coexistence projects, some through USAID. Last August, the United States announced that the money would be diverted to matters were deemed higher priority to U.S. interests.

Some 180 employees working for the U.S. Embassy in Israel have yet to receive the budgeting for activities for either 2018 or 2019. The leftover money has been diverted to paying salaries and maintaining the organization. According to officials involved in the matter over the past few months, U.S. Ambassador David Friedman has shown no interest in USAID‘s needs and has not held meetings with USAID officials on projects.

USAID officials said that the policy of the ambassador and the Trump administration to stop funding aid is meant to put pressure on Palestinian Authority President Mahmoud Abbas to renew talks with the United States and Israel ahead of the peace plan the U.S. government is expected to present soon.

Israeli Defense officials are reportedly aware of developments regarding the suspension of USAID’s work, but are also concerned over a cessation of American assistance to the United Nations Relief and Works Agency.

Senior defense officials have warned that without an alternative to UNRWA, the situation in Gaza will worsen. UNRWA provides basic food to 1.3 million people in the Gaza Strip, 4 million doctor visits annually to Gaza residents and employs 12,000 teachers who teach about 300,000 children. While aid to UNRWA is more significant than the USAID, the cessation of the activities of both agencies, coupled with no alternative in sight will lead to a decline in the humanitarian situation in the Strip and even to its collapse, by which, Israeli security officials have said, Israel will pay the price in terms of sanitation, security and the economy.