JERUSALEM The United States announced it was halting funding for the United Nations' agency for Palestinian refugees on Friday after declaring the organisation was "irredeemably flawed".
Washington has long been the UN Relief and Works Agency's (UNRWA) largest donor but is "no longer willing to shoulder the very disproportionate share of the burden," State Department spokeswoman Heather Nauert said in a statement.
Nauert said there would be no additional contributions beyond a $60 million dollar payment made in January, drawing condemnation from both the Palestinians and UNRWA.
"The United States will no longer commit further funding to this irredeemably flawed operation," Nauert added.
There have been widespread warnings about the impact of a halt to funding from the US, which contributed $350 million to UNRWA's budget last year.
"We reject and condemn this American decision in its entirety," chief Palestinian negotiator Saeb Erekat said in a statement, calling on all countries "to reject this decision and to provide all possible support" to UNRWA.
UNRWA also slammed the US decision, dismissing Nauert's characterisation of the agency.
UNRWA "expresses deep regret and disappointment at the US' announcement that it will no longer provide funding to the Agency after decades of staunch political and financial support," spokesman Chris Gunness wrote on Twitter.
"We reject in the strongest possible terms the criticism that UNRWA's schools, health centers, and emergency assistance programs are 'irredeemably flawed,'" he said.
UN Secretary General Antonio Guterres said that UNRWA has his "full confidence," calling on "other countries to help fill the remaining financial gap, so that UNRWA can continue to provide this vital assistance."
The agency supports some five million registered Palestinian refugees and provides schooling for 526,000 children in the Palestinian territories as well as in camps in Lebanon, Syria and Jordan.
Fears over funding have already led to warnings from UNRWA that it may have to permanently shut all the 711 schools that it runs after recent temporary closures.
US lost 'status as peacemaker'
And while there was some relief for the agency on Thursday when Germany said it would provide additional funding, UNRWA's director Pierre Krahenbuhl said earlier this week that the agency needs $200 million to continue its work until the end of this year.
The United States also announced last week that it was canceling more than $200 million in bilateral aid to Palestinians in Gaza and the West Bank.
Nauert said the US would "intensify dialogue with the United Nations, host governments, and international stakeholders about new models and new approaches" to help alleviate any impact on Palestinian children.
"We are very mindful of and deeply concerned regarding the impact upon innocent Palestinians, especially school children, of the failure of UNRWA and key members of the regional and international donor community to reform and reset the UNRWA way
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