Israel’s UNRWA dilemma: who else will provide aid to the Palestinians?

If UNRWA is defunded, Israel doesn’t want to fill the breach, and Arab states will demand a roadmap to Palestinian statehood as a condition of their support.

One by one, a series of Western countries announced last week the cutting of funding to the UN agency for Palestinian refugees, UNRWA. Eight countries including Australia, the US, Canada, the UK, and Germany, said they would stop or pause hundreds of millions of dollars in pledges as they reevaluate the agency’s complicity in terrorism against Israelis. 

The decision followed an intelligence report submitted by Israel, in which it proved the involvement of at least 12 Gaza UNRWA employees in the terror attacks of October 7. Israel further argued that as many as 1,300 UNRWA employees, or 10% of its Gaza staff, had ties to Hamas.

The damning report, and its immediate aftermath, seemed to indicate a shift in Israeli policy toward UNRWA, established in 1949 to provide food, employment, and education to Palestinian refugees. After all, Israel had previously relied on the agency and its Western donors to maintain stability in the beleaguered Gaza Strip and West Bank, the latter still held by Israel under military occupation. But the defunding of UNRWA could spell its imminent collapse.

Removing UNRWA as the main aid provider to 1.6 million Palestinians registered in Gaza and 900,000 in the West Bank would place the burden of education, sanitation, and civil governance on Israel. But given Israel’s current security needs – including a demand by the military to increase its budget by 60 billion shekels a year ($A25 billion), effectively doubling it – the burden of administering the Palestinian Territories would prove impossible. Israel would have to find an alternative source of funding, and it would have to do so fast.

Right-wingers may fantasise about long-term Israeli control of Gaza, or even the reestablishment of settlements uprooted by Prime Minister Ariel Sharon in 2005. But given financial realities - if not diplomatic ones - that will remain a pipedream.

Proof of this conundrum was provided in early January, when Prime Minister Benjamin Netanyahu appealed to the President of the United Arab Emirates, Sheikh Muhammad Bin Zayed, to fund unemployment stipends to Palestinian day labourers in the West Bank who had been barred from entering Israel since October 7. The shocked MBZ told Netanyahu to “ask Zelensky for money”, according to a report in American news website Axios.

The UAE, Saudi Arabia and Qatar may eventually prove to be the deep pockets Israel seeks for the bankrolling of the Palestinian Territories, but that will come at a cost. These countries, as well as the US and Western allies, will demand a clear roadmap to Palestinian statehood through negotiations.

However, realities on the ground may develop faster than a diplomatic timetable will allow. Gaza is in a state of urgent crisis, and the potential defunding of UNRWA will make it even worse. No one knows this better than Major General Ghassan Alian, the current head of the Coordinator of Government Activities in the Territories (COGAT).

While Israeli spokespeople are busy condemning UNRWA in public, Alian is visiting the US, convincing officials in the Biden administration that the UN agency cannot not be replaced at this time.

According to Israel Hayom Daily, Alian told US officials that rapid plans had to be made for alternative aid agencies to enter Gaza, including UN agencies. But currently no other body besides UNRWA can undertake the distribution of international aid entering Gaza. The article said that Prime Minister Netanyahu has instructed IDF Chief of Staff Herzi Halevi to come up with an alternative to UNRWA, but no timetable has been set.

Once again, Israel has proved that the strategic planning and coherent policy coordination are not always its strong suits. 

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Israel examines replacements for UNRWA (JNS)
Jerusalem may redirect aid through the World Food Programme.

UNRWA chief visits Gulf countries in bid to plug funding gap (Reuters)
The head of the main U.N. Palestinian relief agency, UNRWA, is visiting three Gulf states this week to drum up support after donors suspended funding following Israeli allegations that some of the agency's staff were involved in the Oct. 7 attack.

French diplomat to review UNRWA after claims of staff role in Hamas attack (Guardian)
Catherine Colonna will lead inquiry after Israel’s accusation that at least 12 UN agency workers were involved in 7 October assault

RELATED ANALYSIS

Running postwar Gaza will require many who worked for Hamas (Zvi Bar’el, Haaretz)
Unless Israel controls Gaza directly, it will have to allow the Palestinian Authority to hire tens of thousands of public servants who were employed by Hamas. A cease-fire could be an opportunity to give the PA the reins of power

When the West collectively punishes Gaza by suspending funding to UNRWA (Amira Hass, Haaretz)
Suspicions that 12 UNRWA employees participated in the October 7 massacres resulted in 15 Western countries punishing all the residents of the Gaza Strip – currently the world's most severe humanitarian disaster zone.