No one will be immune from the political consequences of severe cuts to Palestinian aid

The UN Relief and Works Agency (UNRWA) is the child of both catastrophe and failure.

The catastrophe – or Nakba, as Palestinians call it – was the displacement of hundreds of thousands in the conflict that led to the creation of the state of Israel in 1948.

The failure is more complicated; at its heart is the lack of an equitable solution to the Israel-Palestine conflict amid the expansion of Israeli settlement building and the ever-diminishing horizon for a peace deal.

Over the years those who originally fled their homes have had children, and their children have had children, and so the issue has become no longer one simply of displacement of the original refugees but about a fair resolution for a group of about 5 million people who still look to Palestine and what their families lost.

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In an ideal world, UNRWA would no longer be necessary. But it is very necessary, providing services including education in areas ranging from Gaza and Bethlehem to Jordan, Lebanon and Syria.

Few confronting the disclosure that the Trump administration is poised to fully withdraw its funding from UNRWA have been left in any doubt about the reasoning behind it.

Officials have made clear they see the threat of cuts to Palestinians as a lever to persuade them to agree to a White House-imposed peace deal largely in step with Israel’s vision, and a way to redefine and reduce by a massive order of magnitude who is actually a refugee.

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While there is no mystery over the fact a Trump administration that has already unilaterally recognised Jerusalem as Israel’s capital and is full of fervent pro-Israel advocates made the threat, it is less clear what Trump and his advisers on the issue – not least his son-in-law Jared Kushner – hope will be the outcome of such moves, in particular the squeezing of US aid to Palestinians.

Various overlapping theories are in circulation. The first is that Kushner and his team believe a browbeaten Palestinian leadership can be bullied into a deal on the White House’s terms – an assessment few experts endorse.

A second theory is predicated on a reading that Kushner and his team are more realistic, anticipating the failure of Trump’s boast that he can secure the “deal of the century” between Israelis and Palestinians. In that reading, knowing there is no deal to be won, the Trump administration’s moves are seen instead as a destructive resetting of the long-understood parameters of US foreign policy in the Middle East, including how a peace deal might look.

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Then there is a final hypothesis: that this is nothing more than crude political signalling ahead of the US midterm elections in November, throwing pro-Israel US Christian evangelicals, to whom Trump recently appealed for support in a closed-door meeting, another bone after his recognition of Jerusalem.

What is missing from all these interpretations, however, is any evidence of much understanding of the driving forces in Palestinian politics and where they overlap with security issues.

The places that will suffer the brunt of both the US aid cuts already announced and cuts to UNRWA funding will be exactly those UNRWA-run camps where the poorest Palestinians live in Gaza and the West Bank, which gave birth to the Fatah movement and Hamas.

Outside the occupied Palestinian territories the issue of Palestinian refugees is no less crucial, not least in Jordan where about 2 million people are registered with UNWRA as refugees, with many also having full Jordanian citizenship.

But beyond the humanitarian impact – and potential for unrest – is the greatest intangible of all.

As the Trump administration appears ready to reinforce its already starkly one-sided approach to the the Israel-Palestine issue, it raises the prospect of damage to US diplomacy on an issue it has made its own. This seems certain to far outlast Trump’s time in office, neutralising the ability of the US to act as a mediator for years to come.

Trump’s moves risk creating a dangerous vacuum where – as wiser heads both in the State Department, Pentagon and Israel have cautioned – neither Palestinians or Israelis will be immune from the fallout.