A student stands at the entrance of a school run by the United Nations agency for Palestinian refugees in the Balata camp in the West Bank on August 29, 2018. The Trump administration has decided to cancel all U.S. funding of that U.N. program. (Jaafar Ashtiyeh/AFP /Getty Images)

The Trump administration has decided to cancel all U.S. funding of the United Nations aid program for Palestinian refugees, part of its determination to put its money where its policy is as it seeks a recalculation of U.S. foreign aid spending and prepares its own Israeli-Palestinian peace plan.

In an announcement to be made within the next several weeks, the administration plans to voice its disapproval of the way the U.N. Relief and Works Agency, or UNRWA, spends the funds and to call for a sharp reduction in the number of Palestinians recognized as refugees, dropping it from more than 5 million, including descendants, to fewer than a tenth of that number, or those still alive from when the agency was created seven decades ago, according to officials familiar with the decision.

Any such reduction would effectively eliminate, for most Palestinians, the “right of return” to land contested with Israel. More immediately, many regional foreign policy and security experts, including in Israel, say that slashing UNRWA’s budget, amid a call to “de-register” refu­gees, would worsen an already disastrous humanitarian situation, especially in Gaza, and sharply increase the level of violence.

In addition to contributions to UNRWA, the United States has provided direct, bilateral assistance to the West Bank and Gaza. Last week, the State Department announced that more than $200 million in already appropriated aid for this year would be “redirected” elsewhere. The cuts in funding, along with shifts in policy, including recognition of Jerusalem as Israel’s capital, are part of a major reshaping of Middle East policy under President Trump.

While few in the region believe that right of return could ever be fully exercised, it has long been considered a core issue to be negotiated in any peace agreement. The administration cannot unilaterally change U.N. rules for who is considered a refu­gee eligible for UNRWA aid — which now includes descendants of those originally ousted from their land and homes.

The U.N. General Assembly, in which there is great sympathy for the Palestinians, has reapproved UNRWA’s mandate and terms by a massive majority every three years since it created the agency in 1949, one year after the creation of the state of Israel.

The administration’s response, according to officials who spoke on the condition of anonymity to discuss the sensitive issue, is that if the United Nations wants the money, it needs to change UNRWA’s rules and the way it operates.

The administration objects to many things about UNRWA beyond the definition of a refu­gee. “First of all, you’re looking at the fact that, yes, there’s an endless number of refugees that continue to get assistance, but more importantly, the Palestinians continue to bash America,” Nikki Haley, the U.S. ambassador to the United Nations, said Tuesday in remarks at the Washington-based Foundation for Defense of Democracies.

Officials of the governing Palestinian Authority, Haley said, “have their hand out wanting UNRWA money,” which pays for schools and essential services for Palestinians in the West Bank and Gaza, as well as in Jordan, Syria and Lebanon.

The administration also wants other countries in the region who carry the banner of Palestinian rights to pay. “Where is Saudi Arabia? Where is the United Arab Emirates? Where is Kuwait?” Haley said. “Do they not care enough about Palestinians to go and give money to make sure these kids are taken care of?”

Although Europeans and Arab countries also contribute substantial amounts, the United States has long been the largest individual donor to UNRWA, pledging about one-third of the agency’s $1.1 billion in 2017 budgetary and emergency contributions. Early this year, the administration cut a scheduled UNRWA payment of $130 million in half to $65 million. Under the new decision, that will be the last donation.

The United States currently provides nearly $4 billion in mostly military annual aid to Israel.

A U.S. 'immoral scandal'

As it readies its peace plan, now 18 months in the making with no release date in sight, the White House is seeking to take the right of return off the table, as Trump has said he eliminated the future of the contested city of Jerusalem from negotiations late last year when he recognized it as the capital of Israel.

Ever since the Jerusalem decision, the Palestinian Authority led by President Mahmoud Abbas has refused to meet with White House aides Jared Kushner and Jason Greenblatt and others working on the plan. While they have released no details, U.S. officials have indicated the plan is likely to include infusions of development aid, particularly to Hamas-controlled Gaza.

The goal, officials have said, is both to woo Palestinians away from Hamas, by appealing to their desire for better lives amid seemingly endless strife and deprivation under terrorist leaders, and to make it more difficult for Abbas, a Hamas rival, to continue to rebuff U.S. overtures.

On Monday, as reports of an upcoming decision on UNRWA circulated, Abbas’s office released a statement accusing the administration of “stripping millions of Palestinians of their refu­gee status.” Foreign Policy first reported a U.S. decision to end UNRWA funding Tuesday.

“After using humanitarian aid to blackmail and pressure the Palestinian leadership to submit to the empty plan known as ‘the deal of the century,’ the Trump administration plans to commit an immoral scandal against Palestinian refugees by giving itself the right to abolish [their] historical rights,” Abbas spokesman Ahmad Shami said.

In Israel, reports about UNRWA and refu­gee definitions have sparked a sharp debate between those who would like to see an end to the agency — which they say perpetuates a myth that Palestinians and their descendants might one day return to the land they have lost since Israel’s creation — and those who say UNRWA’s demise will bring the collapse of the Palestinian Authority, fueling Hamas and other extremist elements.

Israel’s official position is that there is no right of return and that such a notion would lead to the eventual demise of the Jewish state. Prime Minister Benjamin Netanyahu has said repeatedly that UNRWA perpetuates the problem instead of trying to solve it, and has suggested that UNRWA could gradually be incorporated into the main U.N. refu­gee organization, the United Nations High Commissioner for Refugees.

UNHCR, Netanyahu said, has “clear criteria for supporting genuine refugees, not fictitious refugees as happens today under UNRWA.”

Retired Lt. Col. Peter Lerner, a former Israeli military spokesman, voiced concern that despite UNRWA’s widely recognized faults, “doing this in an abrupt way will cause the situation to spiral out of control. That’s not good for Israel or the Palestinians.”

Aaron David Miller, director of the Middle East program at the Wilson Center and a former State Department negotiator in the region, said defunding West Bank contributions and redefining Palestinian refu­gee status would create “more economic and social dislocation in the West Bank, expanding opportunities for Hamas influence there and . . . security problems for the Israelis who, whether they like it or not, will be stuck with the consequences.”

Two agencies, same goal

Many UNRWA critics appear to believe incorrectly that ­UNHCR does not recognize descendants of registered refugees as genuine refugees themselves. The two organizations have the same definition — giving assistance to those driven from their countries because of a well-founded fear of persecution, war or violence and to their descendants for as long as that status continues.

The goal, according to both agencies, is to repatriate refugees, integrate them into countries where they have fled or resettle them in third countries. But the decision not to go home is up to the refugees themselves.

“They have to decide,” said UNRWA spokesman Christopher Gunness. “We couldn’t say to you, ‘You’re a citizen now’ ” — as Jordan has declared some 2 million Palestinians in that country — “ ‘you have to give up the right of return.’ ”

In addition to those in Jordan, about 800,000 Palestinians are registered as refugees in the West Bank, 1.3 million in Gaza, 534,000 in Syria and 464,000 in Lebanon. “You cannot wish away 5.4 million people,” Gunness said. “There has to be a settlement based on international law and on U.N. resolutions.”

“The fact that any particular member state decides to withhold funding does not change our mandate,” he said. “It just means we have less money to implement it.”

After talks here last week with Secretary of State Mike Pompeo, Jordanian Foreign Minister Ayman Safadi has made a global appeal for others to contribute and launched a Twitter storm stressing “the serious consequences” of a failure to provide necessary support to UNRWA.

Administration officials dismiss the “sky is falling” anxiety regarding UNRWA while citing the ability of other countries to do more.

At the same time, Haley said, “If there are certain things that are not beneficial to our interests and the things that we fight for, we’re going to get out of it.”

Eglash reported from Jerusalem. Carol Morello contributed to this report.