U.S. halts funding to UN agency for Palestinian refugees

The United States onFriday halted all funding to a UNagency that helpsPalestinian refugees in a move likely to further heightentensions between the Palestinians and the Trump administration.

A spokespersonfor Palestinian President Mahmoud Abbasdenounced the decision as "a flagrant assault against thePalestinian people and a defiance of UNresolutions."

U.S. State Department spokesperson Heather Nauert said thebusiness model and fiscal practices of the United Nations Reliefand Works Agency (UNRWA) were an "irredeemably flawedoperation."

"The administration has carefully reviewed the issue anddetermined that the United States will not make additionalcontributions to UNRWA," she said in a statement.

Nauert said the agency's "endlessly and exponentiallyexpanding community of entitled beneficiaries is simplyunsustainable and has been in crisis mode for many years."

Agency rejects criticism

The latest announcement comes a week after theadministration said it would redirect $200 million USin Palestinian economic support funds for programs in the West Bankand Gaza.

The UNRWA said Friday it was disappointed and surprised by the U.S. decision.

"We reject in the strongest possible terms the criticism that UNRWA's schools, health centresand emergency assistance programs are 'irredeemably flawed,'" Chris Gunness, a spokespersonfor the agency, said on Twitter.

UNRWA said it provides services to about fivemillionPalestinian refugees in Jordan, Lebanon, Syria and the West Bankand Gaza. Most are descendants of people who fled or were forced out of the British Mandate of Palestineinthe 1948 war that led to the creation of the state of Israel.

U.S. previously withheld funding

U.S. President Donald Trump and his aides say they want toimprove the Palestinians' plight, as well as start negotiationson an Israeli-Palestinian peace agreement.

But under Trump, Washington has taken a number of actionsthat have alienated the Palestinians, including the recognitionof Jerusalem as Israel's capital. That move a reversal oflongtime U.S. policy led Palestinian leadership to boycottWashington's peace efforts.

The United States paid out $60 million to UNRWA in Januarybut withheld another $65 million pending a review.

"Such a punishment will not succeed to change the fact thatthe United States no longer has a role in the region and that itis not a part of the solution," Abbas spokesperson Nabil AbuRdainah told Reuters.

He said "neither the United States nor else will be able todissolve"UNRWA.

In Gaza, the Islamist group Hamas also condemned the U.Smove as a "grave escalation against the Palestinian people."

"The American decision aims to wipe out the right of returnand is a grave U.S escalation against the Palestinian people,"said Hamas spokesperson Sami Abu Zuhri.

Germany ups contributions

Abu Zuhri told Reuters the "U.S leadership has become anenemy of our people and of our nation and we will not surrenderbefore such unjust decisions."

Earlier on Friday, German Foreign Minister Heiko Maas saidGermany would increase its contributions to UNRWA because thefunding crisis was fuelling uncertainty. "The loss of thisorganization could unleash an uncontrollable chain reaction,"Maas said.

UNRWA has faced a cash crisis since the United States, longits biggest donor, slashed funding earlier this year, saying theagency needed to make unspecified reforms and calling on thePalestinians to renew peace talks with Israel.

The last peace talks collapsed in 2014, because ofIsrael's opposition to an attempted unity pact between the Fatahand Hamas Palestinian factions and as a result of Israeli settlementbuilding on occupied lands thatPalestinians seek for a state,among other factors.

Nauert said the United States would intensify talks with the United Nations, the region's governments and international stakeholders that could involve bilateral U.S. assistance for Palestinian children.

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