The United States sent $60 million to keep the United Nations Relief and Works Agency (UNRWA) in operation but withheld a further $65 million, while urging other countries to increase their funding, a State Department official said Tuesday.
"There is a need to undertake a fundamental re-examination of UNRWA, both in the way it operates and the way it is funded," the official said.
The US had frozen a $125 million grant to UNRWA earlier this month, amounting to one third of the US annual aid to the organization. Part of the grant was unfrozen Tuesday.
The move follows tweets by US President Donald Trump in which he questioned the wisdom of providing hundreds of millions of dollars in aid to the Palestinian Authority given their refusal to resume peace talks with Israel.
The United States is the largest single donor to UNRWA, providing approximately a fourth of the organization's budget.
Reports in Israel on Thursday indicated that the Israeli Foreign Ministry is opposed to Trump’s planned cut in the aid to UNRWA, fearing the possibility of resulting unrest, but Jewish Home chairman Naftali Bennett said this month that cutting aid to UNRWA is the correct move.
For years, UNRWA has been a target for criticism in light of Hamas's activity in its educational institutions and the use of its facilities by Palestinian Arab terrorist organizations in Gaza.
UNRWA was documented storing Hamas rockets and weapons "designed to kill Israeli citizens" in its schools, a fact which the UNRWA chief admitted himself.
In addition, the organization has actively taken part in inciting anti-Semitic violence.
It has perpetuated the status of Palestinian "refugees" for generations instead of working towards their absorption in host countries, continuing to call residents of camps located in the Palestinian Authority refugees. Audits have shown that the number of "refugees" in UNRWA lists is highly inflated.