On Saturday, the U.S. State Department officially announced that it is ending all funding to the United Nations Relief and Works Agency (UNRWA) - the UN's body tasked with supporting Palestinian refugees.
In a statement on the matter, spokeswoman Heather Nauert described the organization as "irredeemably flawed". She also criticized the agency's business model and fiscal practices as "unsustainable" and having been in "crisis mode" for many years.
"The U.S. administration has carefully reviewed the issue and will not make additional contributions to UNRWA," Nauert said.
In the past, the U.S. has been the biggest single donor to the UN agency - which was established by the UN General Assembly in 1949 - donating more than $350 million in 2017.
According to The National, a spokesman for Palestinian President Mahmoud Abbas later said the move was an "assault" against his people.
In addition, UNRWA representative Chris Gunness defended the agency in a series of tweets while expressing "deep regret and disappointment at the U.S.' announcement".
The UAE's Minister of State for Foreign Affairs Dr. Anwar Gargash also stated that the U.S. decision was "regrettable".
Meanwhile, the UN's Secretary General Antonio Guterres said he has "full confidence" in UNRWA and called on other countries "to help fill the remaining financial gap".
In January 2018, after threatening to withhold $65 million in funding to UNRWA, the U.S. said it wanted the agency to reform and believed other countries should increase the amounts they currently contribute.
Countless Palestinian officials have accused the current administration of worsening tensions due to its pro-Israel stance. In December 2017, Donald Trump controversially recognized Jerusalem as Israel's capital.
His move overturned decades of "U.S. neutrality" on the issue, attracted international criticism, and led to the Palestinian Authority cutting off dialogue in Washington.
In May 2018, the U.S. then opened an embassy in Jerusalem, a move described by Palestinian officials as a "blatant provocation".
What is UNRWA?
UNRWA was originally set up to take care of hundreds of thousands of Palestinians displaced following the 1948 Arab-Israeli war.
The agency offers educational, health, and social services across the West Bank, Gaza, Jordan, Syria, and Lebanon to more than five million registered Palestinian refugees.
Furthermore, it educates around 500,000 children in nearly 700 schools and its doctors see more than nine million patients in 150 primary health clinics every year.