The Trump administration on Tuesday cut tens of millions of dollars in aid money for Palestinian refugees, demanding that the U.N. agency responsible for programs assisting the refugees undertake a "fundamental re-examination," the U.S. State Department said.
In a letter, the State Department notified the U.N. Relief and Works Agency that the U.S. is withholding $65 million of a planned $125 million funding installment. The letter also makes clear that additional U.S. donations will be contingent on major changes by UNRWA.
"We would like to see some reforms be made," said State Department spokeswoman Heather Nauert, adding that changes are needed to the way the agency operates and is funded. "This is not aimed at punishing anyone."
The State Department said it was releasing the remainder of the installment – $60 million – to prevent the agency from running out of cash by the end of the month and closing down.
The U.S. is UNRWA's largest donor, supplying nearly 30% of its budget. The agency focuses on providing health care, education and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria and Lebanon.
"Given the long, trusted, and historic relationship between the United States and UNRWA, this reduced contribution threatens one of the most successful and innovative human development endeavors in the Middle-East," UNRWA chief Pierre Krahenbuhl said in a statement.
The Palestinian Liberation Organization reacted angrily to the move, saying it was targeting "the most vulnerable segment of the Palestinian people and depriving the refugees of the right to education, health, shelter and a dignified life."
"It is also creating conditions that will generate further instability throughout the region and will demonstrate that it has no compunction in targeting the innocent," the PLO leadership said in a statement.
PLO official Wasel Abu Yousif condemned the budget cut, saying the American administration was "set on deleting the rights of Palestinians."
Yousif added: "U.S. President [Donald] Trump announced Jerusalem as the capital of the [Israeli] occupation, but he doesn't have the right to do so, in a move against international law and agreements, in an attempt to dismiss Jerusalem as an eternal capital of Palestine. Jerusalem will always be the capital of Palestine."
U.N. Secretary General Antonio Guterres said he was not aware of the decision, but warned that UNRWA provides "vital services."
"I am very concerned and I strongly hope that in the end it will be possible for the United States to maintain the funding of UNRWA, in which the U.S. has a very important share," he told reporters at the U.N.
Guterres said the services provided by UNRWA were "of extreme importance, not only for the well-being of these populations … but also in my opinion and an opinion that is shared by most international observers, including some Israeli ones, it is an important factor of stability. If UNRWA will not be in a position to provide the vital services and the emergency forms of support that UNRWA has been providing this will create a very, very serious problem and we will do everything we can to avoid this situation," he said.
Israel's Ambassador to the U.N. Danny Danon praised the move Tuesday, arguing that UNRWA misuses humanitarian aid to support propaganda against the Jewish state and perpetuate the Palestinians' plight.
"It is time for this absurdity to end and for humanitarian funds to be directed toward their intended purpose: the welfare of refugees," Danon said in a statement.
"UNRWA has proven time and again to be an agency that misuses the humanitarian aid of the international community and instead supports anti-Israel propaganda, perpetuates the plight of Palestinian refugees and encourages hate," he said.
The U.S. donated $355 million to UNRWA in 2016 and was set to make a similar contribution this year, with the first installment to have been sent this month. But after a highly critical Jan. 2 tweet from Trump on aid to the Palestinians, the State Department opted to wait for a formal policy decision before sending its first installment.
Trump's tweet expressed frustration over the lack of progress in his attempts to broker peace between Israel and the Palestinians, and he pointed the finger at the Palestinians. "We pay the Palestinians HUNDREDS OF MILLIONS OF DOLLARS a year and get no appreciation or respect," he said. "But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?"
Israelis accuse the U.N. agency of contributing to Palestinian terrorism and allowing its facilities to be used by Hamas. They also complain that some of UNRWA's staff are biased against Israel.
Nauert said the United States believes there needs to be more "burden-sharing," a regular Trump complaint about multilateral organizations dependent on significant contributions of U.S. cash.
"We don't believe that taking care of other nations and other people have to be solely the United States' responsibility," she said.
The U.S. plan to withhold some, but not all, of the money was backed by U.S. Secretary of State Rex Tillerson and U.S. Defense Secretary James Mattis, who offered it as a compromise to demands for more drastic measures by U.S. Ambassador to the U.N. Nikki Haley, officials said.
Haley wanted to cut U.S. aid completely until the Palestinians resumed peace talks with Israel – talks that have been frozen for years. But Tillerson, Mattis and others argued that ending all assistance would exacerbate instability in the region, notably in Jordan, a host to hundreds of thousands of Palestinian refugees and a crucial U.S. strategic partner.
Eliminating or sharply reducing the U.S. contribution could hamstring the agency and severely curtail its work, putting great pressure on Jordan and Lebanon as well as the Palestinian Authority. Gaza would be particularly hard hit. Some officials, including Israelis, warn that it might push people closer to Hamas, which controls Gaza.
Even if Washington provided the additional $65 million, the $125 million total would be well below the $355 million that a U.S. official said it gave UNRWA in at the end of the 2017 fiscal year on Sept. 30.
