Israel on Saturday praised the United States' decision to end funding for the UN agency responsible for providing education, health care and other services to Palestinian refugees, while Palestinian officials said the move threatened peace in the region.
"Israel welcomes the American decision," Israeli Prime Minister Benjamin Netanyahu's office said in a statement. "It's worth transferring the money to other organizations which will use the money for the benefit of the population and not for the perpetuation of refugees."
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Israel has long complained that the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) serves to sustain the conflict, because it underpins the "right to return" of Palestinian refugees, a right that Israel rejects.
The head of the Palestine Liberation Organization (PLO) delegation to the United States, Husam Zomlot, accused the Trump administration of reneging on its international commitment and doing Israel's bidding.
"By endorsing the most extreme Israeli narrative on all issues including the rights of more than five million Palestinian refugees, the US administration has lost its status as peacemaker and is damaging not only an already volatile situation, but the prospects for future peace in the Middle East," Zomlot said in a statement.
In a widely trailed announcement Friday, the US State Department said it was ending funding for UNRWA because it believed the United States was shouldering too much of the burden of paying for it. It also said UNRWA had failed to enact reforms.
"The United States will no longer commit further funding to this irredeemably flawed operation," State Department spokeswoman Heather Nauert said.
The United States has long been the biggest single donor to UNRWA, donating more than $350 million to the agency in 2017.
A senior Trump administration official and a regional diplomat briefed on the decision had suggested the funding announcement would include a rejection of the Palestinian refugees' right to return.
Instead the State Department statement just spoke critically of what it called UNRWA's "endlessly and exponentially expanding community of entitled beneficiaries" -- a reference to the fact that descendants of the original refugees are also classified as refugees.
UNRWA now looks after more than 5 million people in Gaza, the West Bank and Jerusalem, as well as neighboring Jordan, Syria and Lebanon.
When it was founded in 1949, the agency was tasked with providing assistance for the 700,000 Palestinians who had either fled or been expelled from their homes during the war that accompanied the foundation of the state of Israel.
In a statement on its website, UNRWA expressed "deep regret and disappointment" at the United States' announcement.
Rejecting the US criticism, the statement said UNRWA's programs had a "proven track record in creating one of the most successful human development processes and results in the Middle East.
"The international state community, our donors and host countries have consistently praised UNRWA for its achievements and standards. The World Bank described our activities as a 'global public good' and recognized us for running one of the most effective school systems in the region, in which students regularly outperform their peers in public schools."
Pierre Krähenbühl, Commissioner-General of UNRWA, said this week that the agency's 711 schools in Syria, Jordan, Lebanon, Gaza and the West Bank, including East Jerusalem, were opening on time for their 526,000 students despite its current "unprecedented" $217 million deficit.
He welcomed increased and new donations from other members of the international community which he said had gone some way to filling a funding gap created when the US initially decided to reduce its contributions to UNRWA early this year.
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