US freezes aid for Palestinian refugees: Report

The United States has frozen $125mn in funding for a UN agency that provides aid to Palestinian refugees, Axios news site reported on Friday, but a US State Department official said no decision had been made on the payment.

Days after President Donald Trump threatened to withhold future aid payments to Palestinians, Axios said the funding was frozen until the US government finishes its review of aid to the Palestinian Authority.

The sum, a third of the annual US donation to the United Nations Relief and Works Agency (UNRWA), was supposed to be delivered by 1 January, Axios said, citing three unidentified Western diplomats.

The State Department official, who spoke on condition of anonymity, said: "That [Axios] story is very misleading. Just because they were expecting the money on the first, and they did not get it at that time, does not mean it was suspended or cancelled. Deliberations are ongoing, and we have until mid-January to make a final decision."

Asked if any preliminary decision had been made, the official replied: "No. And reports to that effect are false."

Trump said on Tuesday he would withhold money from the Palestinians, accusing them of being “no longer willing to talk peace” with Israel.

"We pay HUNDRED OF MILLIONS OF DOLLARS a year and get no appreciation or respect. They don't even want to negotiate a long overdue peace treaty with Israel ... with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?" Trump said on Twitter.

Palestinians said the US could not be seen as an impartial interlocutor to the Palestinian-Israeli conflict after Trump recognised Jerusalem as Israel's capital and set a process in motion to move the embassy from Tel Aviv. 

Trump's move was slammed by most of the international community and at the UN General Assembly.

More than 600,000 Palestinians were pushed out or forced to flee their homes before and during 1948 when the state of Israel was established. Millions of Palestinian refugees, 1948 survivors and their descendants, are scattered in the West Bank and Gaza Strip and across neighbouring Arab countries.

They largely depend on UNRWA aid for health care, education and other essential services.