The Trump administration has not yet transferred a planned $125 million payment to the United Nations (U.N.) agency charged with assisting Palestinian refugees amid frustrations over a lack of progress on a peace deal between the Palestinians and Israelis.

Axios reported Friday that the Trump administration had frozen the funding to the U.N. Relief and Works Agency (UNRWA), and was conducting a broader review of U.S. assistance to the Palestinian Authority. That money, according to Axios, was supposed to be transferred on Jan. 1.

A State Department official denied that the department had missed a deadline, telling The Hill that funding decisions were still underway.

"Contrary to reports that we have halted funding to UNRWA, the decision is under review. There are still deliberations taking place, and we have missed no deadline," the official said.

A State Department official had told Axios that the funds were not necessarily frozen, and that the administration has until Jan. 15 to decide its next steps.

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There is no formal deadline for transferring the funds, though donors usually do so early in the year.

Chris Gunness, a spokesman for UNRWA, said in a statement that no decision had yet been made on the funding.

“Based on extensive conversations with interlocutors in the U.S. Administration, our understanding is that no decision has been made on the question of American funding to UNRWA,” he said.

The $125 million in question amounts to about a third of Washington's annual donations to the agency.

According to Axios, Trump is considering cutting that portion of the funding altogether, and is weighing slashing as much as $180 million in U.S. funding to UNRWA.

U.S. Ambassador to the United Nations Nikki Haley Nimrata (Nikki) Haley'The soul' versus 'law and order' Author Ryan Girdusky: RNC worked best when highlighting 'regular people' as opposed to 'standard Republicans' GOP lobbyists pleasantly surprised by Republican convention MORE suggested this week that the U.S. could cut funding for the Palestinians unless they agreed to return to the negotiating table with Israel.

Trump took to Twitter to make similar threats, blaming the Palestinians for the stalled peace process.

The State Department told UNRWA officials this week that no hold had been placed on the money, but that the Trump administration was conducting a review of funding to the Palestinians, according to a U.N. official who spoke on background to discuss internal deliberations on the matter.

That official also said, however, that Haley told U.N. Secretary-General Antonio Guterres this week that the funding to UNRWA was, in fact, on hold.

The UNRWA is separate from the Palestinian Authority, and does not play a role in the decision on whether to enter peace talks with Israel.

The Palestinian Authority suspended contacts with the Trump administration last month after the president announced that the U.S. would recognize Jerusalem as Israel's capital. Palestinian officials and other leaders in the Arab and Muslim worlds have said that the move essentially disqualified the U.S. from brokering peace talks in the region.

Israelis consider Jerusalem their eternal capital, but Palestinians have also long aspired to establish the city's eastern sector as the capital of a future Palestinian state, making the city a sensitive subject in potential peace talks.

– This story was updated Jan. 6 at 3 p.m. with additional information