The United States has announced its withholding $65 million in aid to Palestinian refugees but is insistent the move is not aimed at punishing Palestinians.

Washington officially announced Tuesday that it is freezing the funds “for future consideration.” The money was set to be allocated to the United Nations Relief and Works Agency (UNRWA) which works with Palestinian refugees.

"This is not aimed at punishing anyone,” State Department spokeswoman Heather Nauert told a media briefing.

It was initially reported ten days ago that Washington would withhold $125 million from the UN-affiliated body, but official word only arrived Tuesday. The funds were supposed to be paid at the start of the year.

The decision to suspend the aid comes two weeks after President Donald Trump threatened to cut funding. In a tweet on January 2, Trump said the US gets no “appreciation or respect” from Palestine despite donating hundreds of millions of dollars a year.

“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.

The tweets came after Palestinian President Mahmoud Abbas rejected Trump’s move to recognize Jerusalem as the capital of Israel. Abbas added that the US can no longer be considered an honest broker in the Israeli-Palestinian peace negotiations.

A US official, who spoke to Reuters on condition of anonymity, did not link the fund freeze to the president’s tweets, instead demanding that other countries do more to help Palestine.

“It is time other countries, some of them quite wealthy, step in and do their part to advance regional security and stability,” the official said. </s> President Donald Trump listens people speak in support of Republican tax policy reform, during an event in the Grand Foyer of the White House, Wednesday, Dec. 13, 2017, in Washington.

U.S. President Donald Trump said the United States may withhold future payments to the Palestinians because they are "no longer willing to talk peace" with Israel, and that Israel would have "had to pay more" in future negotiations in return for his recognition of Jerusalem as Israel's capital in December.

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Trump made the comments on Twitter on Tuesday, saying: "It's not only Pakistan that we pay billions of dollars to for nothing, but also many other countries, and others. As an example, we pay the Palestinians 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."

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...peace treaty with Israel. We have taken Jerusalem, the toughest part of the negotiation, off the table, but Israel, for that, would have had to pay more. But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them? — Donald J. Trump (@realDonaldTrump) January 2, 2018

>>FACT CHECK: How much funding does the U.S. give the Palestinians - and what would happen if Trump cuts it

Trump went on to write: "We have taken Jerusalem, the toughest part of the negotiation, off the table, but Israel, for that, would have had to pay more. But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?"

Trump's tweet implied that he intended to extract possible future concessions from Israel for his recognition of Jerusalem as Israel's capital, and that in light of the subsequent Palestinian decision to stop all engagements with the Trump administration, he plans to significantly decrease American funding to the Palestinian Authority.

In response to the Trump's tweets, Dr. Hanan Ashrawi, a senior member of the PLO Executive Committee, said that Trump had "not only violated international law," but had "singlehandedly destroyed the very foundations of peace."

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Ashwari accused Trump of sabotaging the Palestinians' "search for peace, freedom and justice," charging that the U.S president was now blaming the Palestinians "for the consequences of his own irresponsible actions!"

Trump's comments came hours after U.S. Ambassador to the United Nations, Nikki Haley, said during a press conference in New York that the Trump administration would cut funding to UNRWA, the UN's agency for aiding Palestinian refugees, unless the Palestinian Authority went back to the negotiating table.

It was not immediately clear from Haley's comments if she was referring only to UNRWA's funding, or to general U.S. funding related to the Palestinian Authority, but either way, her statement will be perceived as a threat and an attempt to coerce the Palestinians into peace talks under the guidance of the Trump administration.

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When @nikkihaley says the #US will stop funding @UNRWA - how big is the threat? Here is the agency’s 2016 top-20 donors list. The #US is the largest bilateral donor. Read more: https://t.co/BhWw2VTf9S pic.twitter.com/6KGqRpWKSN — Noa Landau (@noa_landau) January 2, 2018

"He doesn't want to give any additional funding until the Palestinians agree to come back to the negotiation table, and what we saw with the resolution was not helpful to the situation," Haley said. "We're trying to move for a peace process, but if that doesn't happen, the president is not going to continue to fund that situation."

Haley added that "I stood proudly, even if I was the only hand in the Security Council, to fight for the will of the people of the United States. They wanted to see the embassy moved to Jerusalem and we followed through with that. We very much still want to have a peace process, nothing changes with that. The Palestinians now have to show the world they want to come to the table. As of now, they're not coming to the table, but they ask for aid. We're not giving the aid, we're going to make sure they come to the table and we want to move forward with the peace process."

Thus far, UNRWA has not been informed of any changes in U.S. funding to the agency, organization spokesman Christopher Gunness said. </s> WASHINGTON (Reuters) - The United States will give a U.N. agency $60 million in aid for Palestinians but withhold a further $65 million for now, a U.S. official said on Tuesday as the Trump administration appeared to carry out a threat it made two weeks ago to cut funding.

While saying the decision would sustain schools and health services, the U.S. official echoed U.S. President Donald Trump in calling on other nations to provide more funds because he believes the United States pays more than its share.

The decision to keep back some money is likely to compound the difficulty of reviving Israeli-Palestinian peace talks and to further undermine Arabs’ faith that the United States can act as an impartial arbitrator, particularly following Trump’s Dec. 6 announcement reversing decades of U.S. policy and recognize Jerusalem as Israel’s capital.

A Palestinian official quickly criticized Washington’s decision to keep back some of the money and United Nations Secretary-General Antonio Guterres said he was unaware of any change on aid but he was “very concerned” about the possibility of a cut in funding.

The U.S. official, who spoke on condition of anonymity, said the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) that will receive the money needed to be fundamentally reevaluated “in the way it operates and the way it is funded.”

“Without the funds we are providing today, UNRWA operations were at risk of running out of funds and closing down. The funds provided by the United States will prevent that from happening for the immediate future,” the official said, saying the additional “$65 million will be held for future consideration.”

In a Twitter post on Jan. 2, Trump said that Washington gives the Palestinians ”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 added in his tweet.

While the U.S. official did not link the U.S. decision to Trump’s tweet, he made a point often advanced by the president by saying the United States had been UNRWA’s single largest donor for decades and demanded other nations do more.

“It is time other countries, some of them quite wealthy, step in and do their part to advance regional security and stability,” the official said.

Trump’s aides initially debated whether to cut off all UNRWA aid after the tweet, a second U.S. official said. But those opposed to the idea argued that it could further destabilize the region, the official said.

“This decision confirms the U.S administration is continuing in wiping out the rights of the Palestinian people,” Palestine Liberation Organization official Wasel Abu Youssef told Reuters.

“First was declaring Jerusalem as the capital of Israel and today the refugee issue,” he said.

Historically, U.S. administrations had said the status of Jerusalem must be decided in Israeli-Palestinian peace talks. The city is holy to three major monotheistic faiths.

At the United Nations, Guterres told reporters that the services provided by UNRWA were “of extreme importance, not only for the wellbeing of these populations ... but also in my opinion and an opinion that is shared by most international observers, including some Israeli ones, it is an important factor of stability.”

“So if UNRWA will not be in a position to provide the vital services and the emergency forms of support that UNRWA has been providing this will create a very, very serious problem and we will do everything we can to avoid this situation,” he said. </s> WASHINGTON (Reuters) - The United States will give a U.N. agency $60 million in aid for Palestinians refugees but withhold a further $65 million for now, the State Department said on Tuesday, as the Trump administration carried out a threat it made two weeks ago to cut funding.

While saying the decision would sustain schools and health services, State Department spokeswoman Heather Nauert echoed President Donald Trump in calling on other nations to provide more funds because he believes the United States pays more than its share.

The decision to keep back some money is likely to compound the difficulty of reviving Israeli-Palestinian peace talks and to further undermine Arabs' faith that the United States can act as an impartial arbitrator, particularly following Trump's Dec. 6 announcement reversing decades of U.S. policy and recognizing Jerusalem as Israel's capital.

A Palestinian official quickly criticized Washington's decision to withhold some of the money and United Nations Secretary-General Antonio Guterres said he was unaware of any cut in aid but he was "very concerned" about the possibility.

The State Department notified the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) of the decision in a letter, Nauert said at a daily briefing. She said the Trump administration was conditioning the release of the additional funds on whether the organization makes unspecified reforms.

She insisted, however, the U.S. decision was "not aimed at punishing" anyone.

A U.S. official, who spoke on condition of anonymity, said UNRWA must be fundamentally reevaluated "in the way it operates and the way it is funded."

"Without the funds we are providing today, UNRWA operations were at risk of running out of funds and closing down. The funds provided by the United States will prevent that from happening for the immediate future," the official said, saying the additional "$65 million will be held for future consideration."

In a Twitter post on Jan. 2, Trump said that Washington gives the Palestinians "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 added in his tweet.

While U.S. officials did not link the U.S. decision to Trump's tweet, they made a point often advanced by the president by saying the United States had been UNRWA’s single largest donor for decades and demanded other nations do more.

"The United States government and the Trump administration believes there should be more burden sharing going around," spokeswoman Nauert said.

Trump’s aides initially debated whether to cut off all UNRWA aid after the tweet, a second U.S. official said. But those opposed to the idea argued that it could further destabilize the region, the official said.

"UNRWA has proven time and again to be an agency that misuses the humanitarian aid of the international community and instead supports anti-Israel propaganda, perpetuates the plight of Palestinian refugees and encourages hate," Danny Danon, Israel's ambassador to the United Nations, said.

Palestine Liberation Organization official Wasel Abu Youssef told Reuters: "This decision confirms the U.S administration is continuing in wiping out the rights of the Palestinian people. First was declaring Jerusalem as the capital of Israel and today the refugee issue."

Historically, U.S. administrations had said the status of Jerusalem must be decided in Israeli-Palestinian peace talks. The city is holy to three major monotheistic faiths.

At the United Nations, Guterres told reporters that the services provided by UNRWA were "of extreme importance, not only for the well-being of these populations ... but also in my opinion and an opinion that is shared by most international observers, including some Israeli ones, it is an important factor of stability."

"So if UNRWA will not be in a position to provide the vital services and the emergency forms of support that UNRWA has been providing this will create a very, very serious problem and we will do everything we can to avoid this situation," he said. </s> WASHINGTON: The United States has frozen US$125 million (£92.1 million) in funding for a U.N. agency that provides aid to Palestinian refugees, Axios news site reported on Friday, days after President Donald Trump threatened to withhold future aid payments to Palestinians.

The funding, a third of the annual U.S. donation to the United Nations Relief and Works Agency, was supposed to be delivered by Jan. 1 but was frozen until the U.S. government finishes its review of aid to the Palestinian Authority, Axios reported, citing three unidentified Western diplomats.

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.

The United States is the largest donor to the agency, with a pledge of nearly US$370 million as of 2016, according to UNRWA’s website. </s> WASHINGTON (AP) - President Donald Trump is threatening to cut off U.S. aid money to the Palestinian Authority and acknowledging that the Middle East peace process appears to be stalled.

Trump says in a pair of tweets that, "we pay the Palestinians 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."

He adds that, "with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?"

Trump infuriated many when he announced late last year that the U.S. would consider Jerusalem the capital of Israel and move its embassy there.

Trump has long said he wants to broker Mideast peace, calling it "the ultimate deal." </s> Media playback is unsupported on your device Media caption Trump: "I don't know that [peace talks] will ever take place"

US President Donald Trump has threatened to halt aid to the Palestinians if they do not agree to take part in peace talks.

The state department confirmed he was talking about aid for economic and security assistance.

Mr Trump accused the Palestinians of "disrespecting" the US, and said: "Why should we do something for them when they do nothing for us?"

The Palestinians have rejected the US as a neutral broker in peace talks.

They are furious at Washington's controversial decision in December to recognise Jerusalem as the capital of Israel.

Former Palestinian negotiator Saeb Erekat said of the US president's latest comments: "Trump could buy many things with his money, but he won't be able to buy the dignity of our nation."

Why the focus on Palestinian aid?

Speaking at the World Economic Forum in Davos in Switzerland, Mr Trump said the US gives the Palestinians "hundreds of millions of dollars in aid and support" a year.

He chastised the Palestinian leadership for "disrespecting... our great Vice-President" Mike Pence by refusing to meet with him in the region earlier in the week.

And he said he was the first US president to link the issue of aid funding to the peace process.

"That money is on the table and it's not going to them unless they sit down and negotiate peace," he said, sitting beside Israeli Prime Minister Benjamin Netanyahu.

"I can tell you that Israel does want to make peace and they're [the Palestinians] going to have to want to make peace too or we're going to have nothing to do with it any longer."

Image copyright EPA Image caption Mr Trump accused Palestinian leaders of "disrespecting" US Vice-President Mike Pence

The US announced earlier this month that it was withholding more than half of a tranche of funding for the UN agency supporting Palestinian refugees, amounting to about $65m (£46m).

But the US state department later confirmed this was not the aid Mr Trump was referring too. He was instead talking about bilateral funding for economic support and some security training.

US bilateral aid to the Palestinians amounted to $260m in 2016. By contrast, Israel receives more than $3bn in military aid per year from the US.

Aid as a bargaining tool

Barbara Plett Usher, BBC News, State Department Correspondent

This seems to be the first time the White House has used aid as a bargaining chip to try to force the Palestinians to negotiate peace.

It's one way to "shake things up" in hopes of getting people "back to the table," according to the state department spokesperson Heather Nauert.

There would be at least a tremor if the US withheld the bilateral aid. Most of it goes to economic development projects, though some is also used to train security forces.

But the practical outcome of Mr Trump's statement might be limited. Israel needs the PA to run the occupied territories and may counsel against weakening it. Politically this has made the Palestinians even more adamant about rejecting sole US leadership of any peace talks.

Mr Trump's manoeuvre has also underscored the failure of President Mahmoud Abbas, who staked everything on the US-led process and now might have less than nothing to show for it. Perhaps this will be what it takes to "shake up" the ossified Palestinian leadership.

What about the peace process?

The US president said his administration had a "proposal for peace" that was "a great proposal for the Palestinians" and suggested Israel was prepared to make some concessions.

"You won one point," he said to Mr Netanyahu, referring to Jerusalem, "and you'll give up some points later on in the negotiation, if it ever takes place."

But he added: "I don't know that they [peace talks] will ever take place."

The last round of on-off peace talks between the two sides collapsed amid acrimony in April 2014.

What did Trump say about Jerusalem?

Mr Trump stood by his decision to recognise Jerusalem as Israel's capital - a move that broke with decades of a US policy of neutrality on the issue and put it out of step with the rest of the international community.

He told Mr Netanyahu: "Israel has always supported the United States so what I did with Jerusalem was my honour."

And he reiterated his view that by taking "Jerusalem off the [negotiating] table... we don't have to talk about it any more" - suggesting it could move forward the peace process.

"They [the Palestinians] never got past Jerusalem," he said.

Media playback is unsupported on your device Media caption Why the ancient city of Jerusalem is so important

The status of Jerusalem goes to the heart of the Israeli-Palestinian conflict.

Israel regards Jerusalem as its "eternal and undivided" capital, while the Palestinians claim East Jerusalem - occupied by Israel in the 1967 Middle East war - as the capital of a future state.

What do the Palestinians say?

The Palestinian ambassador to the US said they were not being "disrespectful of anybody... we were just respectful of our rights and defending our internationally endorsed rights".

Dr Husam Zomlot admitted that the lack of US aid would "directly affect hundreds of thousands, if not millions, of innocent, vulnerable people all over the region".

But, he told the BBC, "financial pressure for coercive political agendas does not work.. especially when our position is supported by the international community".

He said Mr Trump had not just "taken Jerusalem off the table, he has taken the table altogether". He called for an international table "that can actually deliver us where we want to go".

Mr Abbas has dismissed previous threats by Mr Trump to cut US aid as "blackmail". He has also said he would not accept any peace plan proposed by the US.

Image copyright AFP/Getty Images Image caption Palestinian President Mahmoud Abbas has accused Donald Trump of "blackmail" over past threats to cut US aid

What does Israel say?

Prime Minister Netanyahu was effusive in his praise of Mr Trump over his decision to recognise Jerusalem as Israel's capital.

"By recognising history, you've made history, and we will always remember that," he told the US president.

He later told a meeting at Davos that "under any peace agreement the capital of Israel will continue to be in Jerusalem".

He also said that "the Palestinians should have all the power to govern themselves but none of the power to threaten us".

"In any political arrangement the Jews must retain security control in the area, because otherwise you'll have [the Islamic State group] ... We have a mosaic of failed states in the Middle East, and we don't want another one," he continued.

Find more on this story here: </s> A report that Washington has frozen a $125 million payment to the United Nations Relief and Works Agency is being denied by a US official, according to Reuters. UNRWA provides aid to Palestinian refugees.The $125 million, a third of what the US contributes annually, was supposed to be paid Monday.On Tuesday, US President Donald Trump tweeted he was considering halting payments to the PA. The sentiments were echoed by the US envoy to the UN, Nikki Haley."But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?" Trump wrote.The frozen amount represents more than a third of the $300 million the US contributes to UNRWA annually. Haley threatened to withhold the funds last week, after Palestinian President Mahmoud Abbas rejected Trump's move to recognize Jerusalem as the capital of Israel.Just because the funds were not transferred does not mean they were frozen, Ravid quotes a State Department official as saying.On January 3, Hamas spokesperson Fawzi Barhoum called the threats to defund UNRWA and the Palestinian Authority "cheap political blackmail" that "reflects American barbaric behavior."Palestinian negotiator Saeb Erekat Trump is "threatening to starve Palestinian children in refugee camps and deny their natural rights to health and education if we don't endorse his terms and dictations."On Friday, Israeli Prime Minister Benjamin Netanyahu publicly supported Trump's "critical attitude towards UNRWA," according to statement from his office.Privately, however, Netanyahu urged Trump not to enact the cuts, according to the Times of Israel . That assessment is shared by the Israeli security establishment and the Coordinator of Government Activities in the Territories (COGAT) - the Israeli body that administers the West Bank and Gaza - according to Ravid's report. A senior Israeli official told him that the "humanitarian situation in Gaza is complicated enough and harming UNRWA funding will only make it more complicated."UNRWA was set up in 1949, following the establishment of the state of Israel. The agency provides education, social services and healthcare to more than </s> FILE PHOTO: A general view of Jerusalem shows the Dome of the Rock, located in Jerusalem's Old City on the compound known to Muslims as Noble Sanctuary and to Jews as Temple Mount December 6, 2017. REUTERS/Ronen Zvulun/File Photo

WASHINGTON (Reuters) - The United States has frozen $125 million in funding for a U.N. agency that provides aid to Palestinian refugees, Axios news site reported on Friday, but a 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 U.S. government finishes its review of aid to the Palestinian Authority.

The sum, a third of the annual U.S. donation to the United Nations Relief and Works Agency, was supposed to be delivered by Jan. 1, 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 canceled. 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.”

UNRWA spokesman Chris Gunness said the agency had not been “informed directly of a formal decision either way by the U.S. administration.”

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.

The United States is the largest donor to the agency, with a pledge of nearly $370 million as of 2016, according to UNRWA’s website.
President Donald Trump tweets that the U.S. may withhold future payments to the Palestinian authority, over 350 million dollars per year, because they are "no longer willing to talk peace" with Israel, and that Israel "would have had to pay more" in return for his recognition of Jerusalem as Israel's capital.