The United States has frozen $125 million in aid to the UN’s Palestinian refugee agency over Palestinian Authority President Mahmoud Abbas’s refusal to enter US-led peace talks with Israel, Channel 10 reported Friday.

According to the report, the funding was meant to be transferred by January 1, but was being held up because the White House is furious over the Palestinians’ reaction to US President Donald Trump’s recognition of Jerusalem as Israel’s capital last month. Palestinian Authority President Mahmoud Abbas has broken off all contact with the Trump administration.

In addition, the TV report said, US officials have informed the United Nations that the Trump administration is weighing slashing a total of $180 million in aid to the refugee agency, according to the television report. This sum, which would include the $125 million said to currently be frozen, would constitute about half the US’s annual aid to UNRWA. The US is the refugee agency’s single largest donor.

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Quoting Western diplomats, the report said such a cut would be “a catastrophe” for the organization and would impact Palestinian refugees in camps in the Gaza Strip, West Bank and Lebanon.

On Wednesday, top PLO official Saeb Erekat said a threatened US cut to UNRWA’s budget would “starve Palestinian children in refugee camps and deny their natural rights to health and education.”

Administration sources told Channel 10 that while a final decision has not been made, the aid cuts are “absolutely being considered” in light of the Palestinians’ behavior. US officials met Friday at the White House to discuss the matter, the TV report said.

Following Trump’s December 6 declaration, Abbas said the US was no longer an honest broker in Israeli-Palestinian negotiations. He has refused to meet with US officials regarding the peace process, including envoy Jason Greenblatt and Vice President Mike Pence.

While Prime Minister Benjamin Netanyahu has yet to publicly address Trump and US Ambassador to the UN Nikki Haley’s publicly stated threats earlier this week to cut American funding to UNRWA, Channel 10 reported Thursday that he is privately urging the US not to go through with the cuts.

Friday’s Channel 10 report suggested Netanyahu would publicly back the move, amid pressure from right-wing lawmakers such as Jewish Home leader Naftali Bennett, and in order not to undermine Trump.

The Axios news site reported that Netanyahu has been in contact with the White House regarding UNRWA funding and that Israel prefers a “gradual disengagement” from the refugee agency.

In response to the report, the Prime Minister’s Office said: “Netanyahu supports President Trump’s critical attitude towards UNRWA and believes practical steps need to be taken in order to change the fact that UNRWA is being used to entrench the Palestinian refugee problem instead of solving it.”

An Israeli security source also told Channel 10 the funding cuts to UNRWA would make an already tense situation in Gaza “much worse.”

Since Trump’s decision, there has been a marked uptick in rocket fire at Israel by terrorist groups in the coastal enclave, where residents only have access to electricity between four to six hours a day.

Defense Minister Avigdor Liberman on Thursday accused the Iran-backed Palestinian Islamic Jihad terrorist group of being behind some of the recent attacks and warned that Israel will do “anything we have to” in order to prevent future attacks.

On Tuesday, US envoy to the UN Haley warned US support for UNRWA would end if the PA refuses to enter negotiations with Israel.

“I think the president has basically said that he doesn’t want to give any additional funding until the Palestinians are agreeing to come back to the negotiation table,” she said. “We’re trying to move for a peace process but if that doesn’t happen the president is not going to continue to fund that situation.”

Later that same day, Trump made a vague threat regarding all US funding for the PA. He dismissed Palestinian fury over his recognition of Jerusalem as Israel’s capital, saying he had planned for Israel “to pay” in future negotiations for his declaration, and complained that But Palestinian intransigence was now preventing any progress on peace talks.

“They don’t even want to negotiate a long overdue peace treaty with Israel,” he tweeted. “We have taken Jerusalem, the toughest part of the negotiation, off the table, but Israel, for that, would have had to pay more.”

“But with the Palestinians no longer willing to talk peace,” he went on, “why should we make any of these massive future payments to them?”

The United States was the biggest donor to UNRWA in 2016, giving some $368 million. The same year, it donated another $357 million to Palestinian aid projects, including $290 million through USAID and $54 million for security and justice assistance.

The US does not deliver aid money directly into the PA’s coffers. Instead, to avoid possible misuse of funds, particularly to pay the salaries of convicted terrorists, the US channels aid into specific projects.

US officials have been insisting that they remain intent on seeking a peace treaty. When Greenblatt came to the region two weeks ago, even though he was shunned by Ramallah, the administration emphasized that its peace efforts remain a priority.