In the wake of Israeli allegations that a dozen employees of the UN agency for Palestinian refugees were involved in the October 7 Hamas terror attacks, several donor countries have withdrawn funding for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). These include Germany, the United States, Canada, Australia, Japan, Italy, the Netherlands, Finland, Switzerland and the United Kingdom.

UN Secretary-General Antonio Guterres has called on donor states to "guarantee the continuity" of the UN agency. 

Philippe Lazzarini, the head of UNRWA, has since stated that the suspected staff members have been dismissed and that the agency is launching an internal investigation into the matter. 

Lazzarini also said that 2 million people in the Gaza Strip depend on continued aid from the agency and that this operation is now "collapsing." According to UNRWA officials, the agency currently provides shelter for roughly 1.2 million displaced Gazans in addition to basic medical care.

So what is the special UN agency for Palestinians?

Why was the UNRWA created?

UNRWA was founded in 1949, shortly after the start of the 1948 Arab-Israeli war. It became operational in May 1950.

The UN General Assembly founded the agency to offer aid to the more than 750,000 Palestinians who fled their homes during or leading up to the conflict surrounding the founding of Israel on May 14, 1948, when five Arab states invaded the brand new state.

Some fled in anticipation of the war, were forced to flee by groups fighting for Israel or fled after finding themselves caught in the crossfire. In Palestinian memory, the displacement period from 1947-49 is known as the Nakba, the Arabic word for "catastrophe." 

UNRWA helps provide education, health care and welfare to some 6 million Palestinian refugees in Jordan, Syria, Lebanon, the occupied West Bank and Gaza. "[It] is perceived as a lifeline by Palestinian refugees," Lazzarini told DW in an interview in 2022.

Half of the agency's budget is dedicated to education. UNRWA runs over 700 schools and is the only UN agency that operates a full-fledged school system, it said in a May 2023 press release. 

How is UNRWA financed?

The agency receives nearly all of its funding from the voluntary donations of UN member states. In 2022, a total of pledges of $1.17 billion (€1.1 billion) were made, around half of which came from European Union member states.  

In January 2023, the agency appealed to increase its budget to around $1.6 billion, but as of May 2023, only 25% of that total — around $364 million — had been pledged. 

UNRWA has been underfunded for the past decade and has run at a deficit since its founding. It began the year 2023 with around $75 million in debt. 

The US, long a significant backer of the agency, cut funding in 2018 at the behest of former President Donald Trump, who was generally critical of the UN and UNRWA specifically. Washington had since resumed funding. The US has provided the most funding to the agency, followed by Germany, the European Union and Sweden.

Why is UNRWA controversial?

Trump and Israeli politicians, including Prime Minister Benjamin Netanyahu, have criticized the agency's definition of who can be considered a Palestinian refugee.

UNRWA has said Palestinian refugees are "persons whose normal place of residence was Palestine during the period 1 June 1946, to 11 May 1948, and who lost both home and means of livelihood as a result of the 1948 conflict." UNRWA website also states: "The descendants of Palestine refugee males, including adopted children, are also eligible for registration."

Netanyahu has called the agency a "refugee perpetuation agency" and argued for its dissolution, saying this job shouldn't be the responsibility of the United Nations.

UNRWA said that if the agency were shut down, those recognized as refugees "would still be Palestine refugees and retain their rights under [UN] General Assembly Resolution 194, pending a just and lasting solution to their plight."

Edited by: Cathrin Schaer