The union representing the UN agency that serves Palestinian refugees called off a lengthy strike in the West Bank on Thursday evening, according to Palestinian news agency Wafa.
The decision means almost 900,000 Palestinians will once more have access to the vital services provided by the agency, UNRWA, which includes schooling, physical and psychological medical care and rubbish disposal.
The strike, over a pay dispute, was announced at the beginning of March.
The agency has long maintained that underfunding and a drop in international donations led to a deterioration in the services it was able to provide.
Earlier in June, UN Secretary General Antonio Guterres said that UNRWA was nearing collapse due to limited funds.
Mr Guterres described the agency as a "safety net for the most vulnerable [and] a pillar of regional stability".
"We allow UNRWA to be remain trapped in financial limbo. Soaring needs are met by stagnating funds [and] some of the largest and most reliable donors have recently signalled to UNRWA they might reduce their contributions," he added.
"Every year we meet – and every year we confront the same contradiction."
The EU and its member states, followed by the US, traditionally make up the largest donors to the organisation.
UNRWA was set up in 1948 after the establishment of the state of Israel forced hundreds of thousands of Palestinians into refugee camps.
With the passage of time, the agency's responsibilities and function evolved, giving it a more complex mission.
Donor fatigue, aid commitments elsewhere and government cuts gradually led to a funding crisis, despite the organisation routinely maintaining that it would have a severe impact on the Palestinians it serves, in Palestinian territories and in countries with large Palestinian refugee populations, such as Lebanon and Jordan.
The organisation has also faced intense criticism from Israel, including accusations that, for example, it does too little to eradicate inciting material from the textbooks it uses in schools, a charge the agency has consistently denied.
