Donald Trump’s administration is preparing to withhold tens of millions of dollars from the UN agency for Palestinian refugees.
The US President will cut the year’s first contribution by more than half, or perhaps entirely, and make additional donations contingent on major changes to the organisation, US officials have said.
Mr Trump is yet to make a final decision, but appears more likely to send only $60m (£44m) of the planned $125m (£91m) first instalment to the UN Relief and Works Agency (UNRWA), the officials told the Associated Press.
The US is UNRWA’s largest donor, supplying nearly 30 per cent of its total budget.
The agency focuses on providing health care, education and social services to Palestinians in the occupied West Bank, Gaza Strip, Jordan, Syria and Lebanon.
Hundreds of thousands of Palestinians either fled or were forced from their homes during the war that led to Israel’s establishment in 1948.
Today, there are an estimated five million refugees and their descendants, mostly scattered across the region.
The plan to withhold some of the money is backed by Rex Tillerson, the US Secretary of State, and James Mattis, the Defence Secretary, who offered it as a compromise to demands for more drastic measures by Nikki Haley, the US Ambassador to the UN, the officials said.
Ms Haley wants a complete cutoff in US money until the Palestinians resume peace talks with Israel that have been frozen for years.
But Mr Tillerson, Mr Mattis and others say ending all assistance would exacerbate instability in the Middle East, notably in Jordan, a host to hundreds of thousands of Palestinian refugees and a crucial US strategic partner.
Last week, Mahmoud Abbas, the Palestinian President, railed at Mr Trump in a fiery, two-hour-long speech.
He said “shame on you” for Mr Trump’s treatment of the Palestinians and warned he would have no problem rejecting what he suggested would be an unacceptable peace plan.
The US donated $355m (£260m) to UNRWA in 2016 and was set to make a similar contribution this year.
But after a highly critical tweet by Mr Trump about aid to the Palestinians on 2 January, the State Department opted to wait for a formal policy decision before sending any of the funding.
Mr Trump expressed his frustration over the lack of progress in his attempts to broker peace between Israel and the Palestinians.
“We pay the Palestinians HUNDREDS OF MILLIONS OF DOLLARS a year and get no appreciation or respect,” he tweeted. “But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?”
Eliminating or sharply reducing the US 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 the militant Hamas movement, which controls Gaza.
The US officials said any reduction in American assistance could be accompanied by calls for European nations and others to help make up the shortfall.
Additional reporting by Associated Press
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