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story.lead_photo.caption FILE - In this Jan. 10, 2018, file photo, President Donald Trump speaks during a news conference in the East Room of the White House in Washington. The Trump administration is preparing to withhold tens of millions of dollars from the U.N. agency for Palestinian refugees, cutting the year's first contribution by more than half or perhaps entirely, and making additional donations contingent on major changes to the organization, according to U.S. officials. (AP Photo/Evan Vucci, File)

WASHINGTON -- President Donald Trump's administration on Tuesday cut tens of millions of dollars in money for Palestinian refugees, demanding that the U.N. agency responsible for the programs undertake a "fundamental re-examination," the State Department said.

In a letter, the State Department notified the U.N. Relief and Works Agency that the U.S. is withholding $65 million of a planned $125 million funding installment to the body. The letter also makes clear that additional U.S. donations will be contingent on major changes by the agency, which has been heavily criticized by Israel.

"We would like to see some reforms be made," said State Department spokesman Heather Nauert, adding that changes are needed both to the way the agency operates and is funded. "This is not aimed at punishing anyone."

The State Department said it was releasing the rest of the installment -- $60 million -- to prevent the agency from running out of cash by the end of the month and closing down.

The U.S. is the U.N. agency's largest donor, supplying nearly 30 percent of its budget. The agency focuses on providing health care, education and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria and Lebanon.

"Given the long, trusted, and historic relationship between the United States and UNRWA, this reduced contribution threatens one of the most successful and innovative human development endeavors in the Middle-East," agency chief Pierre Krahenbuhl said in a statement.

Hundreds of thousands of Palestinians either fled or were forced from their homes during the war that led to Israel's establishment in 1948. Today, there are an estimated 5 million refugees and their descendants, mostly scattered across the region.

The Palestinian Liberation Organization reacted angrily to the move, saying it is targeting "the most vulnerable segment of the Palestinian people and depriving the refugees of the right to education, health, shelter and a dignified life."

But Israel's ambassador to the U.N., Danny Danon, praised the move, arguing that the U.N. agency misuses humanitarian aid to support propaganda against the Jewish state and perpetuate the Palestinians' plight.

"It is time for this absurdity to end and for humanitarian funds to be directed towards their intended purpose: the welfare of refugees," Danon said in a statement.

The U.S. donated $355 million to the U.N. agency in 2016 and was set to make a similar contribution in this year; the first installment was to have been sent this month. But after a highly critical Jan. 2 tweet from Trump on aid to the Palestinians, the State Department opted to wait for a formal policy decision before sending its first installment.

Trump's tweet expressed frustration over the lack of progress in his attempts to broker peace between Israel and the Palestinians, and he pointed the finger at the Palestinians.

Israelis accuse the U.N. agency of contributing to Palestinian militancy and allowing its facilities to be used by militants. They also complain that some of the agency's staff are biased against Israel.

Information for this article was contributed by Josh Lederman of The Associated Press.

A Section on 01/17/2018

Print Headline: U.S. cutting $65M in Palestinian aid

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