The US halted funding to the United Nations Relief Works and Agency (UNRWA), which has been assisting Palestinian refugees.
State Department spokeswoman Heather Nauert claims the UNRWA is an unsustainable and “irredeemably flawed operation”.
“The administration has carefully reviewed the issue and determined that the United States will not make additional contributions to UNRWA,” she said.
“(the UNRWA’s) endlessly and exponentially expanding community of entitled beneficiaries is simply unsustainable and has been in crisis mode for many years.”
Palestine has criticised the decision, with a spokesman for President Mahmoud Abbas labelling the decision a “flagrant assault against the Palestinian people and a defiance of UN resolutions”.
The announcement is the latest in a series alienating Palestine, including an announcement last week that $US200 million would be redirected from economic support for Palestine into funding for programs in the West Bank and Gaza.