The Trump administration has decided to end all funding for the United Nations agency that provides humanitarian assistance to more than five million Palestinian refugees, Foreign Policy reported on Tuesday.
The decision was reportedly made at a meeting earlier this month between President Donald Trump's advisor Jared Kushner and Secretary of State Mike Pompeo, several sources told FP.
A State Department spokesperson declined to comment on the meeting but told FP that "US policy regarding UNRWA has been under frequent evaluation and internal discussion."
The decision to stop all funding to UNRWA comes months after cuts to the agency by the US, leading to fears among Palestinian officials that Trump is trying to eliminate the issue of refugees from future peace negotiations.
In January, the US, the largest donor to the agency, slashed some $300 million from its annual contribution to UNRWA, prompting an unprecedented financial crisis.
| Trump's administration is seen as attempting to force a peace plan on the Palestinians that is believed to be vastly more favorable towards Israel |
This week, the US cancelled more than $200 million in aid to the Gaza Strip and West Bank.
Washington said the decision comes after a review of aid programmes to the Palestinian territories with the funds allocated to Gaza and the West Bank now directed at "high-priority projects elsewhere", a US official told AFP.
Trump's administration is seen as attempting to force a peace plan on the Palestinians that is believed to be vastly more favorable towards Israel.
Washington is also viewed as using aid money to pressure Palestinians to accept the peace plan.
Palestinian officials said Kushner pressured Jordan during a meeting in June "to strip its more than 2 million registered Palestinians of their refugee status so that UNRWA would no longer need to operate there," Foreign Policy reported.
In emails obtained by the US magazine, Kushner reportedly called for "an honest and sincere effort to disrupt UNRWA."
"This [agency] perpetuates a status quo, is corrupt, inefficient and doesn't help peace," Kushner wrote.
US envoy to the United Nations Nikki Haley claimed on Tuesday that UNRWA's figures of the number of Palestinian refugees is significantly overestimated, calling for the agency to lower its count if it wants to receive US financial assistance.
"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 said.
She said that the right to return, a key demand of Palestinians for any future peace deal with Israel, should also be addressed.
"I do agree with that [right to return being off the table], and I think we have to look at this in terms of what's happening (with refugees) in Syria, what's happening in Venezuela," she said.
"So I absolutely think we have to look at the right of return."
UNRWA was established in the wake of the 1948 Mideast war surrounding Israel's creation. An estimated 700,000 Palestinians fled or were forced from their homes in the fighting, referred to by Palestinians as the Nakba, or catastrophe.
UNRWA provides schools and health clinics to 5.3 million refugees in the Palestinian territories, Jordan, Lebanon and Syria.