UNRWA referred to as 'failed mechanism' by US National Security adviser John Bolton (Reuters)
The United States is cutting more than $200m in aid to the Palestinians, the State Department said on Friday, amid a deteriorating relationship with the Palestinian leadership.
A senior State Department official said without elaborating that the funds, originally planned for programmes in the West Bank and Gaza, would address "high-priority projects elsewhere".
"We have undertaken a review of US assistance to the Palestinian Authority and in the West Bank and Gaza to ensure these funds are spent in accordance with US national interests and provide value to the US taxpayer," the official said in a statement.
"As a result of that review, at the direction of the president, we will redirect more than $200 million in FY2017 Economic Support Funds originally planned for programs in the West Bank and Gaza."
Asked where the money would be redirected and whether it would go to other Palestinian projects, another State Department official said: “We will work with Congress to redirect these funds to other policy priorities.”
Both officials spoke on condition of anonymity.
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The announcement comes at a time when the Palestinian leadership has angered the White House by boycotting its peace efforts since President Donald Trump recognised Jerusalem as Israel's capital and moved the embassy there, reversing decades of US policy.
Trump's son-in-law and senior adviser Jared Kushner is leading an effort to craft a peace plan meant to start talks between Israel and the Palestinians to end a decades-long conflict. A decision on when the initiative may be rolled out has not yet been made.
The State Department cited Hamas's control of Gaza as part of its justification for reallocating the funds. The US and Israel designate Hamas as a terrorist group.
The decision is almost certain to exacerbate the dire humanitarian situation in Gaza. More than 2 million Palestinians are packed into the Gaza Strip, which suffers deep economic hardships.
Palestine Liberation Organization (PLO) Executive Committee member Hanan Ashrawi accused the Trump administration of using "cheap blackmail as a political tool."
"The Palestinian people and leadership will not be intimidated and will not succumb to coercion," she said.
UNRWA cuts
The US had in January announced it would withhold $65m of $125m that it had planned to send to the United Nations Relief and Works Agency, which is funded almost entirely by voluntary contributions from UN states, with the United States as the largest contributor.
US National Security adviser John Bolton told Reuters this week that UNRWA was "a failed mechanism" that violated standard international law on the status of refugees.
UNRWA was founded in 1949 after the first Arab-Israel war, which led to 700,000 Palestinians being forced to leave their homes or flee. It helps about 5 million Palestinian refugees, a figure that includes descendants of those displaced by the fighting.
Back in June, the UN said UNRWA needed more than $200m to fund its projects.
"Failure to provide desperately needed resources comes with a price. More hardship for communities. More desperation for the region. More instability for our world," said UN Secretary-General Antonio Guterres.
"We must do everything possible to ensure that food continues to arrive, that schools remain open and that people do not lose hope," he added.
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