In one neighbourhood of Jerusalem, no one is quite sure who their government is.

The suffocatingly dense district of Shuafat is a Palestinian refugee camp that has grown into a maze of illegally built high-rises, but the Palestinian Authority has no power here.

Israel considers Shuafat under its jurisdiction – its residents pay tax – yet people say the only state presence they feel is when soldiers come in.

Sewage spills on to the road, rubbish burns in old oil drums, and there is no mail system. Few streets have names. Israeli ambulances and fire trucks won’t enter.

So for many residents of Shuafat, the closest thing to a government is the United Nations Relief and Works Agency, UNRWA.

The body was set up to help Palestinians uprooted in the 1948 Arab-Israeli war – at the time considered a temporary crisis. In the absence of peace, UNRWA has continued operations for seven decades, running schools, clinics, sanitation efforts and shelters.



But the aid agency is in crisis after Washington targeted its funding. For the residents on the crowded streets of Shuafat, already notorious as the drug and crime centre of Jerusalem, an end to UNRWA would mean the collapse of nearly all their infrastructure.

Donald Trump says he is using humanitarian aid to Shuafat and more than 5 million Palestinians across the Middle East as leverage to force their leaders into signing up to his yet-to-be-detailed peace initiative.

“That money is on the table and that money’s not going to them unless they sit down and negotiate peace,” he said on Thursday, sitting opposite Israel’s prime minister, Benjamin Netanyahu.

Cutbacks have already started. Last year, the US was the single largest donor to UNRWA, paying $355m, close to half its operating budget. This year, it has contributed $60m.

Blocked off by Israel’s separation barrier, there is only one exit from Shuafat into the rest of Jerusalem, through a military checkpoint. There are no accurate figures regarding how many people live in the camp, which was annexed by Israel after 1967, although UNRWA estimates about 24,000 live there.

Khalid al-Sheikh, 48, works in the Palestinian Child Center, a group in Shuafat that runs reading, music, yoga and other activities.

With overcrowding in schools – up to 46 in a class, al-Sheikh says – the group hopes to reduce psychological stress in a neighbourhood he describes as a “prison”.

A week ago, the girls’ school run by UNRWA was raided by thieves who stole computers. “There are hardly any janitors, no guards,” he said.

“If it was bad before, imagine the situation after. Trump’s decision: it’s a death sentence to the children of the camp,” he said. “If you remove these services, people have nothing left but their dignity.” He warned that the result would be violence.

Shuafat has a history of attacks, both criminal and political. In 2015, the Times of Israel described the camp as a “ticking time bomb”.

Chris Gunness, a spokesman for UNWRA, also warns of the danger of cuts. “Is it in American and Israel security interests to have the collapse of a functioning service provider in Jerusalem?” he asked.

UNRWA also works across the West Bank and Gaza, where Trump’s Middle East policies have met an explosive reaction.

A joint Palestinian-Israeli poll found support for militancy among Palestinians jumped 17% immediately after the US president said he would recognise Jerusalem as Israel’s capital. The declaration broke international consensus that the city’s status would be negotiated by the two sides. Trump now says that issue is off the table.

More than half of the Palestinian refugees UNRWA supports live in other countries –Lebanon, Syria and Jordan. In Lebanon, slum-like conditions and state discrimination in camps regularly lead to clashes with the army.

“We run schools for over half a million children across the region,” said Gunness. “Imagine if those services were to stop ... You would have half a million children on the streets of the Middle East and not in UN schools at a time when extremists are in full recruitment mode. How does that fit with the counter-terrorism narrative of western governments? How does that contribute towards stability in the Middle East?”

UNRWA’s commissioner-general has been travelling around the world meeting governments and individuals in an attempt to cover the shortfall. A public campaign, named “dignity is priceless”, has launched online.

For the moment, Gunness says UNRWA is determined not to make any cuts: “We are robustly determined to maintain services because we are talking about some of the most disadvantaged people in the region.”