When Philippe Lazzarini, commissioner of the UN agency for Palestinian refugees, walked into a conference room in Tel Aviv on January 18, he did not realise the meeting would trigger the deepest crisis in the 75-year-old organisation’s history.
The UN Relief and Works Agency for Palestine Refugees (UNRWA) had survived several wars, combative relations with various Israeli and American leaders, and was engaged in an unprecedented mission — sheltering and feeding hundreds of thousands of Palestinians displaced by the war in Gaza.
But officials from Israel’s ministry of foreign affairs had something explosive on their agenda. The army’s signals intelligence unit claimed to have identified 12 Palestinian UNRWA employees whom it said took part in the October 7 Hamas cross-border raid that killed 1,200 people in Israel, according to Israeli officials.
Lazzarini was shocked, said two people familiar with the meeting. He asked for the evidence, but was not given it, they both said. Instead, he wrote down the names and immediately tasked the UN’s Office of Internal Oversight Services, its in-house watchdog, with investigating.
His announcement on Friday, eight days after the meeting, that nine of those employees had been fired began a diplomatic maelstrom that has plunged the agency critical to 5mn refugees across the region into “a death spiral”, said one UN official.
So far, funding has been pulled by 15 countries, led by the US, that had pledged a total of $444mn for the year out of the group’s total budget of $1.2bn, the group said.
By the end of February, unless other donor countries step up, UNRWA will be unable to pay its 30,000 employees, 13,000 of those within war-ravaged Gaza. It is unclear how it would purchase and distribute the food and medicine that its trucks deliver within the enclave, which depends almost entirely on aid.
With no financial reserves, UNRWA’s operations depend on timely disbursal of pledged funds. Since October 1, its biggest funder, the US, had already sent $121mn of its annual estimated contribution of between $300mn and $400mn, said state department spokesperson Matthew Miller. Any further payments were paused for now, he said.
Other aid organisations would struggle to take on UNRWA’s role, given the complexities of obtaining access to Gaza and the vast scale of need.
Sami Abu Shehadeh, a Palestinian politician in Israel, said that cutting UNRWA’s funding over allegations involving a dozen of its 30,000 staff amounted to “collective punishment”.
“There are 12 UNRWA employees that allegedly participated in the October 7 attacks, clearly not in their official capacity,” he said on social media site X. “Certain countries decided to collectively punish 30,000 employees and 2mn Palestinians in Gaza.”
“Many are hungry as the clock is ticking towards a looming famine,” said Lazzarini on Saturday, as donors began pausing the disbursal of their pledged funds, adding that 2mn people depend on it for “sheer survival”.
For Bassam Khalil, who fled Jabaliya in northern Gaza to an UNRWA shelter in the south with his five children after the war began, the agency’s shuttering “would be a great catastrophe”.
“There are no other donors — only UNRWA gives us flour, oil, canned foods, sugar, milk, blankets and mattresses,” he said. “Who will play their role?”
If UNRWA had to cease operations, “we will all die of hunger”, said Om Ibrahim Alian, a mother of five children including a week-old infant, all of whom survive on UNRWA food coupons, baby formula and diapers.
The ripples extend beyond Gaza itself: if the UNRWA budget were not restored, the agency could be unable to continue running schools and medical facilities across the Middle East, including in Syria, Lebanon and Jordan, said Juliette Touma, UNRWA’s director of communications.
In decades of skirmishes with the Israeli government, parts of which want UNRWA dismantled, this was the worst, said three UN officials.
The agency survived a Trump-era budget cut, when Israeli Prime Minister Benjamin Netanyahu convinced the US president to withhold $300mn in funding for 2018. Faced with that crisis, it raised money from Gulf countries and 40 others.
But this time around, emergency funding could be difficult to obtain, given the nature of the allegations, a UN official said.
These most recent claims built on decades of Israeli objections to the agency, said Anne Herzberg, a legal adviser to NGO Monitor, which seeks to persuade aid organisations and their donors to take more pro-Israel decisions.
Those objections include problems with the idea at the core of UNRWA, which was set up following a 1949 UN resolution that Palestinian refugees have a right to return to their ancestral homelands from which their parents and grandparents were displaced in the 1948 war that led to Israel’s creation.
“The issues with UNRWA go back for many years — how it defines refugees, since new generations can become refugees, and promoting the right of return, which the Israeli government sees as code for destroying Israel as a Jewish state,” she said in an interview.
Israeli critics have assailed the agency for years over the content of textbooks used in its schools, which they say valorise violent resistance to Israel, and have claimed that UNRWA facilities are commandeered by Hamas to fight Israeli troops.
Since October 7, Israel has ramped up its criticism of the agency.
Its staff in Gaza have also suffered during the conflict. More than 150 UNRWA employees in the besieged strip had been killed during Israel’s military campaign, the UN said, and several UNRWA shelters targeted by Israeli firepower. The IDF has said it was responding to attacks on its soldiers.
The latest allegations against UNRWA staff could not be independently verified. But US secretary of state Antony Blinken said on Tuesday that while the US had not corroborated the evidence itself, it found the allegations “highly, highly credible”.
They include the charge that 12 UNRWA employees played a part in the October 7 attacks, including one who kidnapped a woman and another who seized the body of a slain soldier.
Israeli intelligence compared the UNRWA staff database with a list of Hamas members seized during a raid in Gaza, a person familiar with the dossier said, and determined that another 190 employees were affiliated with the militant group, which is designated as a terror organisation by the US, EU and UK.
UNRWA had sent staff lists to Israel every year, and never before received objections, said another person familiar with the situation.
Israeli military intelligence primarily depended on cell phone data intercepted in the days after the attack, said the person familiar with the intelligence assessment. The dossier, reviewed by the Financial Times, indicated that ID cards retrieved from militants added further information.
Israel had unfettered, but surreptitious, access to Palestinian mobile networks, the person said, and had used it to determine how many people took part in the October 7 raid — and especially whether they crossed the border fence.
Israel’s foreign minister, Israel Katz, has already made his demands clear. He has cancelled Lazzarini’s scheduled meetings with the foreign ministry and demanded that the commissioner, a vocal critic of the humanitarian crisis caused by Israel’s military campaign, should resign.
“Supporters of terrorism are not welcome here,” Katz said on X on Monday.
For now, UNRWA’s contact with the Israeli military continued, including daily operations meetings to co-ordinate aid deliveries, said an Israeli military official.
For the IDF, which has responsibilities under international law to facilitate humanitarian assistance to Gaza and to Palestinians in the occupied West Bank, UNRWA’s shutdown would create an aid vacuum that the Israeli military itself could be obliged to fill.
“This is not the ideal time to deal with UNRWA’s problems,” the military official said, asking for anonymity. “The political echelon has its own goals, but this is a complicating factor for [the military].”
Additional reporting by Mai Khaled in Gaza