A US official confirmed the news noting that the Trump administrations demands the UNRWA to carry out reforms to its system.
US President Donald Trump earlier this month threatened to cut US aid to the Palestinians, saying on Twitter that Washington gets “no appreciation or respect” from the Palestinians.
Israel had urged the US to stop funding UNRWA, with Prime Minister Benjamin Netanyahu saying last week that the agency “must disappear from the world”.
The move was met with indignation by Palestinians. Palestine Liberation Organization official Wasel Abu Youssef immediately criticized the decision, casting it as a deliberate US effort to deny the Palestinians their rights and linking it to Trump’s widely criticized Dec.6 decision to recognize Jerusalem as Israel’s capital.
In a statement on behalf of the PLO Executive Committee, Hanan Ashrawi accused the White House of “following Netanyahu’s instructions”.
UNRWA Commissioner-General Pierre Krähenbühl said in a statement that the reduced US contribution “threatens one of the most successful and innovative human development endeavors in the Middle East.”
More than 600,000 Palestinians were pushed out or forced to flee their homes before and during 1948 when the State of Israel was established.
Millions of Palestinian refugees, 1948 survivors and their descendants, are scattered in the West Bank and Gaza Strip and across neighboring Arab countries.
They largely depend on UNRWA aid for health care, education and other essential services.