US pause on funding UN relief agency for Palestinians may become permanent

US officials are preparing for a pause on funding the main UN agency for Palestinians to become permanent due to opposition in Congress, even as the Biden administration insists the aid group's humanitarian work is indispensable.

The United States, along with more than a dozen countries, suspended its funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in January after Israel accused 12 of the agency's 13,000 employees in Gaza of participating in the deadly October 7 Hamas attack.

The UN has launched an investigation into the allegations, and UNRWA fired some staff after Israel provided the agency with information on the allegations.

The United States - which is UNRWA's largest donor, providing $300-$400 million annually - said it wants to see the results of that inquiry and corrective measures taken before it will consider resuming funding.

Even if the pause is lifted, only about $300,000 - what is left of already appropriated funds - would be released to UNRWA. Anything further would require congressional approval.

Bipartisan opposition in Congress to funding UNRWA makes it unlikely the United States will resume regular donations anytime soon, even as countries such as Sweden and Canada have said they will restart their contributions.

A supplemental funding bill in the US Congress that includes military aid to Israel and Ukraine and is supported by the Biden administration, contains a provision that would block UNRWA from receiving funds if it becomes law.

US officials say they recognise "the critical role" UNRWA plays in distributing aid inside the densely-populated enclave that has been brought close to famine by Israel's assault over the past five months.

"We have to plan for the fact that Congress may make that pause permanent," State Department spokesperson Matthew Miller told reporters on Tuesday.

Washington has been looking at working with humanitarian partners on the ground, such as UNICEF and the World Food Program (WFP), to continue giving aid.

But officials are aware that UNRWA is hard to replace.

"There are other organisations that are now providing some distribution of aid inside Gaza, but that is primarily the role that UNRWA is equipped to play that no one else is due to their long standing work and their networks of distribution and their history inside Gaza," Miller said.

UNRWA was established in 1949 by a U.N. General Assembly resolution, after the war that followed Israel's founding, when 700,000 Palestinians fled or were driven from their homes.

Today it directly employs 30,000 Palestinians, serving the civic and humanitarian needs of 5.9 million descendants of those refugees, in the Gaza Strip, West Bank and in vast camps in neighboring Arab countries.

In Gaza, UNRWA runs the enclave's schools, its primary healthcare clinics and other social services, and distributes humanitarian aid.

William Deere, director of UNRWA's Washington Representative Office, told Reuters that US support accounts for one-third of UNRWA's budget.

"That's going to be very hard to overcome," he said. "Please remember that UNRWA is more than Gaza. It’s health care and education and social services. It’s East Jerusalem, the West Bank, Jordan, Syria, Lebanon.”

Fighters from Hamas, which administers Gaza, killed 1,200 people in the Oct. 7 attack and took 253 hostages, according to Israeli tallies, an assault that sparked one of the bloodiest wars in the decades-long Israeli-Palestinian conflict.

Israel's retaliatory military campaign on the densely populated enclave has killed more than 31,000 Palestinians, according to Gaza authorities, while infrastructure has been obliterated and hundreds of thousands are now close to famine.