U.S. stops funding to Palestinian refugee agency due to 'irredeemably flawed operation'

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The individuals say the final decision could be formalized in the coming days.

"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 worldwide donor community to reform and reset the UNRWA way of doing business", she said.

The UN says there are about 5 million Palestinian refugees, including the descendants of people who fled the 1948 war.

That mission is part of a larger campaign by the Trump administration to pressure Palestinians to drop one of their key demands for Middle East peace: a "right of return" to Israel for the five million people in question.

In January the Trump administration provided $60 million in funding but withheld a further $65 million it had been due to provide.

The Palestinian Liberation Organization said a statement that the cut was "a cruel and irresponsible move targeting the most vulnerable segment of Palestinian society".

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The U.S. donated US$355-million to the agency in 2016 and was set to make a similar contribution this year.

Maas said it was clear that the added German funds would not cover a $217 million deficit left by the U.S. withdrawal, and urged the European Union and other states to work toward "a sustainable finance basis for the organization".

Palestinian officials have already accused the U.S. of pro-Israel bias, especially after Mr Trump recognised Jerusalem as Israel's capital and opened a USA embassy in Jerusalem, despite the city being claimed by both sides.

Abu Zuhri said the "US leadership has become an enemy of our people and of our nation and we will not surrender before such unjust decisions".

The refugees' "right of return" to their homeland has always been one of the key core issues in the long-standing Israeli-Palestinian conflict.

Speaking before the announcement on UNRWA, its representative in Washington, Elizabeth Campbell, said the withdrawal of U.S. funding would leave the agency facing a financial crisis, but 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. "It is the failure of the political parties to resolve the refugee situation which perpetuates the continued existence of UNRWA".

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"An immediate and capricious cut off of UNRWA funding ... risks collapsing the Palestinian Authority, empowering Hamas, and shifting the responsibility of health, education, and ultimately security services to the Israelis", Dave Harden was quoted as saying.

"Stopping or cutting aid to UNRWA could really affect UNRWA's operations", he said.

The US decision comes as President Donald Trump and his Middle East pointmen, Jared Kushner and Jason Greenblatt, prepare for the rollout of a much-vaunted but as yet unclear peace plan for Israel and the Palestinians, and it could intensify Palestinian suspicions that Washington is using the humanitarian funding as leverage.

"If you deprive people of their education, their health - their future - this is extremely serious and unsafe", she said.

UNRWA also slammed the United States decision, dismissing Nauert's characterization of the agency.

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