Netanyahu calls for abolition of UN Palestinian refugee agency

Israeli Prime Minister Benjamin Netanyahu has called for the dismantling of the United Nations agency that aids millions of Palestinian refugees, accusing it on Sunday of anti-Israeli incitement. 

Adnan Abu Hasna, a Gaza-based spokesman for the United Nations Relief and Works Agency (UNRWA), said Netanyahu was pursuing a "fantasy".

The United States, Israel's main ally, was the biggest donor to UNRWA last year, pledging $368m.

In public remarks to his cabinet at its weekly meeting, Netanyahu said UNRWA perpetuated, rather than solved, the Palestinian refugee problem and that anti-Israeli incitement was rife in its institutions, which includes schools.

"It is time UNRWA be dismantled and merged with the United Nations High Commissioner for Refugees," Netanyahu said.

Referring to a meeting he held in Jerusalem on Wednesday with Nikki Haley, the US ambassador to the UN, Netanyahu said: "I told her it was time the United Nations re-examine UNRWA's existence."

UNRWA was established by the UN General Assembly in 1949 after hundreds of thousands of Palestinians fled or were expelled from their homes in the 1948 war that followed Israel's creation.

It says it currently aids five million registered Palestinian refugees in the Middle East.

Chris Gunness, UNRWA's chief spokesman, said in an email to Reuters that only the General Assembly, by a majority vote, could change the agency's mandate.

"In December 2016, UNRWA's mandate was extended for three years by the General Assembly by a large majority," he said.

Netanyahu made his comments two days after UNRWA said it had discovered part of a tunnel running under two of its schools in a refugee camp in the Gaza Strip.

UNRWA said it had protested to Hamas, the militant group that rules the enclave and which had used a network of cross-border tunnels to launch attacks inside Israel in a 2014 war. UNRWA condemned the tunnel as a violation of neutrality.

Hamas denied it was responsible for building the tunnel.

Abu Hasna, speaking in Hebrew on Israel Radio, cautioned that if "UNRWA is gone" in the Gaza Strip, where its food, educational and health services are crucial, "two million people will turn into IS [Islamic State] supporters". 

Meanwhile, Israel has so far this year advanced its highest number of settlement projects since 1992, the defence minister said Sunday, despite warnings such plans will further cloud chances of a two-state solution.