GENEVA — Palestinians are in a “state of shock” over the US’s new Middle East peace plan, the head of the UN’s agency for Palestinian refugees said Friday, voicing fears of a surge in violence.

“We certainly have serious concerns that it will result in an escalation in clashes and in violence,” said Christian Saunders, acting head of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

His comments came after US President Donald Trump on Tuesday released the plan, which was seen as heavily biased towards Israel and angrily rejected by Palestinians.

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It recognizes Israeli sovereignty over all of its West Bank settlements and the Jordan Valley, as well as an undivided Jerusalem.

The plan also backs a Palestinian state with a capital on the outskirts of Jerusalem but says the Palestinian leadership must first recognize Israel as a Jewish homeland and agree to a demilitarized state.

Trump presented the long-awaited proposals alongside close ally Israeli Prime Minister Benjamin Netanyahu, who soon signaled he would seek to annex a large part of the West Bank. The US then told Netanyahu to refrain from annexing territory until Israel as a new government after March 2’s elections.

“The plan that was released this week was extremely unsettling for the Palestine refugees living under occupation, under blockade and under conflict after conflict and crisis after crisis,” Saunders told reporters in Geneva.

“I think a lot of people, a lot of Palestinians, are in a state of shock… in a state of disbelief,” he said.

Saunders was in Geneva to launch an appeal to donors to fund UNRWA’s 2020 budget to the tune of $1.4 billion towards essential services and assistance for 5.6 million Palestinian refugees across the Middle East.

UNRWA has faced a severe funding crunch ever since Trump in 2018 decided to suspend, then yank entirely the US contribution to the agency’s budget, robbing it of its top donor.

Trump’s administration, along with Israel, accuses UNRWA of perpetuating the Israeli-Palestinian conflict, including by designating descendants of Palestinians refugees as having refugee status as well, raising the number into the millions.

The agency disputes the criticism and says the services it provides would otherwise not be available to Palestinians.

After the US withdrew funding, a range of other countries stepped up support and UNRWA actually entered 2019 with a surplus of about $60 million, Saunders said.

“Unfortunately … this initial support started to wane, and as a result we have been forced to carry over considerable liabilities into 2020,” he said.

“We are stretched to our limits.”

Saunders has temporarily taken the helm of UNRWA after Swiss national Pierre Krahenbuhl was ousted last year amid allegations of “serious ethical abuses” by the management.

An internal UN probe found no “fraud or misappropriation of operational funds” by Krahenbuhl, but Saunders said the agency had taken criticism of mismanagement seriously.

“Since then we have put the place in order,” he said.

At the same time, he lamented that UNRWA was facing a concerted campaign of misinformation by critics trying to convince parliamentarians in Europe especially not to fund the agency.

The agency was set up in the years after hundreds of thousands of Palestinians were expelled or fled their lands during the 1948 war surrounding the creation of Israel.

It provides schooling and medical services to refugees in Jordan, Lebanon and Syria as well as the Palestinian territories, and employs around 30,000 people, mostly Palestinians.

The Palestinians claim that five million “refugees” — tens of thousands of original refugees from what is today’s Israel, and their millions of descendants — have a “right of return” to Israel. Israel rejects the demand, saying that it represents a bid by the Palestinians to destroy Israel by weight of numbers.

It says there is no justification for UNRWA’s unique criteria, by which all subsequent generations of descendants of the original refugees are also designated as having refugee status, including those born elsewhere and/or holding citizenship elsewhere; such a designation does not apply to the world’s other refugee populations.

Times of Israel staff contributed to this report