The United States on Friday halted all funding to a U.N. agency that helps Palestinian refugees.
The move has further heightened tensions between the Palestinian leadership and the Trump administration.
The administration pledged $60 million to the United Nations Relief and Works Agency (UNRWA) in January but withheld another $65 million pending a review. That remaining $65 million now will be canceled, sources said.
The withdrawal of the U.S. funding is a blow to an agency that currently supports more than 5 million people in Jordan, Lebanon, Syria and the West Bank and Gaza.
The move, comes a week after Washington cut more than $200 million in U.S. aid to the Palestinians.
The Palestinian leadership is said to have angered the White House by boycotting its peace efforts since President Donald Trump recognized Jerusalem as Israel’s capital and moved the embassy there in a reversal of decades of U.S. policy.
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.”
Germany increases contributions
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 agency was founded in 1949 after the first Arab-Israeli war in the wake of the exodus of about 700,000 refugees who fled or were driven out of Israel on its founding as a state.
The Washington Post reported on Thursday that the administration also will call for a sharp reduction in the number of Palestinians recognized as refugees.
U.S. Ambassador to the United Nations Nikki Haley on Tuesday appeared to question the world body’s count of Palestinian refugees.
“We will be a donor if it (UNRWA) reforms what it does … if they actually change the number of refugees to an accurate account, we will look back at partnering them,” Haley told the Foundation for Defense of Democracies think tank.
She also said the “right of return” to Israel, claimed by the Palestinian as part of any eventual peace settlement, should be “off the table.”