The United States announced this week that it was withholding $65 million of a $125 million aid package for the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA), demanding that Palestinians return to the negotiating table. The move was prompted by the Palestinian Authority’s dismissal of Washington’s role in the Israeli-Palestinian peace process after U.S. president Donald Trump declared disputed Jerusalem as the capital of the Jewish state.

In a series of tweets in early January, Trump stated: “… we pay the Palestinians HUNDREDS OF MILLIONS OF DOLLARS a year and get no appreciation or respect … with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?”

The official statement called for a “fundamental re-examination of UNRWA, both in the way it operates and the way it is funded.” This position was promptly countered by UN Secretary-General Antonio Guterres, who expressed concern regarding Washington’s decision. “I strongly hope that in the end, it will be possible for the United States to maintain the funding of UNRWA,” he told AFP. “UNRWA is not a Palestinian institution, but a UN institution,” he said, adding that the agency is “an important factor of stability” in the Middle East.

But is UNRWA, dedicated exclusively to Palestinians, a genuinely impartial institution? For the stability it evidently creates, does it solve problems, or does it prolong them?

A closer look into the modus operandi of UNRWA reveals an interesting paradox of an organization that thrives on a vicious cycle of people it is supposed to save. Yet, even if all of this is true, and even if dismantling the UNRWA might be the right thing to do, the aftermath of this move remains a political minefield.

What is UNRWA?

Israel’s establishment in 1948 was immediately followed by a joint offensive of Egypt, Jordan, Lebanon, Syria and Iraq. The Arab armies suffered a resounding defeat in the first of many conflicts with the Jewish state, and eventually signed armistice agreements with Israel. In the aftermath, Transjordan occupied, and later annexed, Judea, Samaria and East Jerusalem (today known as West Bank), while Egypt retained and administered the Gaza Strip.

The war concluded with the displacement of more than 700,000 Palestinians — while some left of their own volition, a large number were expelled. Almost half of them, 320,000, moved to Transjordan, which eventually granted them citizenship and full rights, remaining, to this date, the only Arab state to do so. A third remained in camps in the Gaza region, 100,000 Palestinians went to Lebanon and 75,000 went to Syria. Over the following years, Israel absorbed approximately the same number of Jewish refugees from Arab states.

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