A day after the US announced it will not give any further funding to UNWRA, the UN agency that aids Palestinian refugees, Israeli officials said the Trump Administration has made clear to them that it intends to see UNRWA closed down altogether and all its functions taken over by other agencies.

The US will not prevent the Gulf states, Arab nations, and others from providing emergency funding to keep UNRWA (the UN’s Relief and Works Agency for Palestine Refugees) functioning this year, Israel’s Hadashot TV news reported on Saturday, quoting senior Israeli diplomatic sources. But it will condition its consent to further funding by US allies in the Arab world on a reevaluation of UNRWA’s role and a redefinition of who the agency defines as a Palestinian refugee. Ultimately the TV report said, the US goal is to “close down UNRWA altogether.”

The US, which is shortly set to issue a report on the whole Palestinian refugee issue, in which it will reportedly state that there are only some 500,000 Palestinian refugees — as opposed to the 5 million-plus claimed by UNRWA — considers that there are only some 20,000 genuine Palestinian refugees outside the West Bank and Gaza Strip, the TV report also said.

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It said the US will now look for other organizations to take on the work done by UNRWA, in education, medical assistance, food aid, and more — with Palestinian recipients acknowledged to be in need of aid, but not considered to be refugees.

To this end, the TV report said, the Trump Administration has already asked King Abdullah of Jordan to take over responsibility for UNRWA’s educational network in Jordan — but has been rebuffed. Similarly, it wants Mahmoud Abbas’s Palestinian Authority to take responsibility for UNRWA schools in the West Bank and Gaza — but this idea is a non-starter at present, with the PA boycotting the Trump Administration.

Abbas’s PA reacted furiously Friday and Saturday to the US decision to defund UNRWA, and is reported to be examining whether there are ways to work via the UN to block US efforts to marginalize and potentially close the agency.

The TV report noted that while Israel’s Prime Minister Benjamin Netanyahu is backing the US in defunding UNRWA, and has called often for the agency to be closed down, Netanyahu is anxious that aid be channeled to needy Palestinians via other avenues, to avoid a further escalation of tension in the West Bank and Gaza.

UNRWA’s spokesman in the Hamas-run Gaza Strip, Adnan Abu Hasna, said Saturday night that he feared the US defunding of UNRWA would lead to increased terrorism. If UNRWA’s network in Gaza now collapses, he said, “what will happen if there are 300,000 school students in the streets of Gaza.” There would, he said, be “more negative energy — that’s a security danger not only for Gaza… but also for Israel. It won’t help peace; it’s a gift to terror.”

Announcing an end to all its funding for UNRWA, the US State Department in a statement Friday castigated the agency for failed practices, and indicated that it rejected the criteria by which UNRWA defines Palestinian refugees, whereby the UN agency confers refugee status not only on original refugees but on their millions of descendants.

The State Department said the US, the largest funder of UNRWA, would “no longer commit further funding to this irredeemably flawed operation.”

“The fundamental business model and fiscal practices that have marked UNRWA for years – tied to UNRWA’s endlessly and exponentially expanding community of entitled beneficiaries – is simply unsustainable and has been in crisis mode for many years,” the statement said, a reference to the fact that the agency grants refugee status to all the descendants of the original Palestinian refugees, something not granted by the UN to refugees from any other place.

However, the statement said the US would look for other ways to aid the Palestinians.

“We are very mindful of and deeply concerned regarding the impact upon innocent Palestinians, especially school children, of the failure of UNRWA and key members of the regional and international donor community to reform and reset the UNRWA way of doing business,” it said, adding that “Palestinians, wherever they live, deserve better than an endlessly crisis-driven service provision model. They deserve to be able to plan for the future.”

The US will now work together with other international groups to find a better model to assist the Palestinians, the statement said.

The US supplies nearly 30 percent of the total UNRWA budget, which provides health care, education, and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria, and Lebanon.

The US donated $355 million to the agency in 2016 and was set to make a similar contribution this year. In January the Trump administration released $60 million in funds but withheld a further $65 million it had been due to provide.

The withdrawal of US funding will leave UNRWA facing a financial crisis, but officials noted that Saudi Arabia, Qatar, the United Arab Emirates, and others have provided more than $200 million in new funding to help cover its budget this year.

Germany said Friday it would also boost funding to the beleaguered UN agency and called for an international effort to sustain the aid body.

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.

Israel’s population is almost nine million, some three-quarters of whom are Jewish. An influx of millions would mean Israel could no longer be a Jewish-majority state.

On Tuesday, the White House also announced that it planned to slash more than $200 million in overall aid to Ramallah.

That same day, US Ambassador to the United Nations Nikki Haley questioned Palestinian claims to a “right of return” to modern Israel, saying she believed that the hot button issue should be taken “off the table.”

Haley suggested the Trump administration would consider an official rejection of the Palestinian demand that all refugees who were displaced between 1947 and 1948 — as well as all of their descendants — be allowed to return to modern-day Israel following a final peace accord.

Last weekend, a Hadashot TV report said the US will announce a policy that, “from its point of view, essentially cancels the ‘right of return.’” It said the US in early September will produce a report that says there are actually only some half-a-million Palestinians who should be legitimately considered refugees, and makes plain that it rejects the UN designation under which the millions of descendants of those displaced between 1947 and 1948 are also considered Palestinian refugees.

Netanyahu has called in the past for UNRWA to be “dismantled.” Last July, for instance, he accused the organization of inciting against Israel while doing nothing to help the plight of Palestinian refugees. He asked why they needed a specific body, when the UN High Commission for Refugees has helped tens of millions of displaced persons since World War II. “The time has come to dismantle UNRWA and have its parts integrated into the UN High Commission for Refugees,” he said, accusing the body of “perpetuating” the plight of Palestinian refugees.