The U.S. on Tuesday announced announced a major cut in its current funding of UNRWA, the United Nations agency dedicated solely to Palestinian refugees, while calling for reforms to the organization.

“There is a need to undertake a fundamental re-examination of UNRWA, both in the way it operates and the way it is funded,” a U.S. official told AFP.

According to the State Department, the U.S. sent UNRWA $60 million to keep the agency operating through the end of the year, but withheld additional planned funding of $65 million, while encouraging other countries to share the burden.

“The United States has been UNRWA’s single-largest donor for decades. In years past, we contributed some 30 percent of UNRWA’s total income,” the American official said, adding, “Without the funds we are providing today, UNRWA operations were at risk of running out of funds and closing down. The funds provided by the United States will prevent that from happening for the immediate future.”

Israeli Ambassador to the U.N. Danny Danon lauded the decision.

“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.

“Just over the last year alone, UNRWA officials were elected to the leadership of Hamas in the Gaza Strip, UNRWA schools denied the existence of Israel, and terror tunnels were dug under UNRWA facilities. It is time for this absurdity to end and for humanitarian funds to be directed towards their intended purpose—the welfare of refugees,” Danon added.

The move by the Trump administration comes amid deteriorating relations between the U.S. and the Palestinian Authority (PA). In a speech on Sunday, PA President Mahmoud Abbas slammed Trump’s attempts to jumpstart peace negotiations as well as America’s recent recognition of Jerusalem as Israel’s capital, saying it was a “slap in the face” and vowing to “slap back.”

“We won’t take orders from anyone. We told Trump we will never accept his [peace] plan. His deal of the century is the slap in the face of the century, and we will not accept it,” Abbas said.

In a statement following the UNRWA announcement, the Palestine Liberation Organization (PLO) blamed Israeli Prime Minister Benjamin Netanyahu for influencing America’s decision.

“The U.S. administration seems to be following Netanyahu’s instructions to gradually dismantle the one agency that was established by the international community to protect the rights of the Palestinian refugees and provide them with essential services,” said Hanan Ashrawi, a member of the PLO Executive Committee.

“This administration is thereby targeting the most vulnerable segment of the Palestinian people and depriving the refugees of the right to education, health, shelter and a dignified life,” she said.

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