A spokesman for Palestinian President Mahmoud Abbas denounced the decision as “a flagrant assault against the Palestinian people and a defiance of U.N. resolutions.”
State Department spokeswoman Heather Nauert said the business model and fiscal practices of the United Nations Relief and Works Agency (UNRWA) were an “irredeemably flawed operation.”
“The administration has carefully reviewed the issue and determined that the United States will not make additional contributions to UNRWA,” she said in a statement.
Nauert said the agency’s “endlessly and exponentially expanding community of entitled beneficiaries is simply unsustainable and has been in crisis mode for many years.”
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The latest announcement comes a week after the administration said it would redirect $200 million in Palestinian economic support funds for programs in the West Bank and Gaza.
UNRWA did not immediately comment on the U.S. decision.
The 68-year-old agency says it provides services to about 5 million Palestinian refugees in Jordan, Lebanon, Syria and the West Bank and Gaza. Most are descendants of people who were driven out of their homes or fled the fighting in the 1948 war that led to Israel’s creation.
U.S. President Donald Trump and his aides say they want to improve the Palestinians’ plight, as well as start negotiations on an Israeli-Palestinian peace agreement.
But under Trump, Washington has taken a number of actions that have alienated the Palestinians, including the recognition of Jerusalem as Israel’s capital. That move was a reversal of longtime U.S. policy and led Palestinian leadership to boycott the Washington peace efforts being led by Jared Kushner, Trump’s senior adviser and son-in-law.
The United States paid out $60 million to UNRWA in January, withholding another $65 million, from a promised $365 million for the year.
Earlier on Friday, German Foreign Minister Heiko Maas said Germany would increase its contributions to UNRWA because the funding crisis was fueling uncertainty. “The loss of this organization could unleash an uncontrollable chain reaction,” Maas said.
UNRWA has faced a cash crisis since the United States, long its biggest donor, slashed funding earlier this year, saying the agency needed to make unspecified reforms and calling on the Palestinians to renew peace talks with Israel.
The last Palestinian-Israeli peace talks collapsed in 2014, partly because of Israel’s opposition to an attempted unity pact between the Fatah and Hamas Palestinian factions and to Israeli settlement building on occupied land that Palestinians seek for a state.
Nauert said the United States would intensify talks with the United Nations, the region’s governments and international stakeholders that could involve bilateral U.S. assistance for Palestinian children.
“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,” she said.
