Live updates: Follow the latest news on Israel-Gaza
The recent funding freeze by major donors threatened to be the death knell for UNRWA, the agency supporting nearly six million Palestinian refugees that has struggled for years to finance its activities.
Yet there is a reluctance to let it go under – at least in the short term – even among nations that have sought its dissolution, including Israel, officials say.
The funding freezes followed Israeli allegations that a handful of UNRWA staff took part in the October 7 attacks by Hamas on southern Israel.
While those accusations are under review by a UN panel, the more immediate impact will be on the agency's ability to continue helping Palestinians in Gaza through the humanitarians crisis created by Israel's war in the territory.
The collapse of UNRWA would deprive millions of Palestinians, not just in Gaza but also in Lebanon, Jordan and Syria, of aid, financial support and the healthcare and education services that the agency provides.
However, it would be a political victory for Israeli Prime Minister Benjamin Netanyahu, who has long called for an alternative to UNRWA, and for his far-right government.
Despite the torrent of Israeli criticism and allegations over the years, the view that the agency is too important to fail has prevailed.
Behind closed doors, even western countries who are allied with Israel are signalling that they would prefer that UNRWA, however flawed, continues assisting Palestinians in Gaza, the occupied West Bank and elsewhere, to prevent further instability in Middle East.
Political and financial pressure
UNRWA chief Philippe Lazzarini acknowledged the pressure on his agency during a visit to Jerusalem on Friday, saying he felt compelled to immediately sack nine of the employees implicated by Israel, instead of the normal practice of suspending them pending an investigation.
“Knowing that the organisation is under fierce and ugly attacks, I could not take the risk,” Mr Lazzarini said. “I could have suspended them, but I fired them.”
Two other employees accused by Israel are reportedly dead, and there is uncertainty about the whereabouts of the third.
The UN is investigating Israel's claims, but even before they emerged Mr Lazzarini had announced a review of the agency's neutrality in mid-January, with former French foreign minister Catherine Colonna appointed as its head this month.
According to three officials in western donor countries who deal with UNRWA, the agency has for years underestimated the Israeli lobby, not only in the US but also in Europe.
The lobby has been arguing for years that UNRWA staff are biased and that the education material in its schools promotes hatred.
“UNRWA have not been helping themselves. Their reactions have not been the best,” said one of the officials, who spoke to The National on condition of anonymity. “You cannot just imply that the issue only concerns a few bad apples, although UNRWA did fire those people and launch an investigation,” he said.
“With so many staff in Gaza, it is plausible that a significant number of them are pro-Hamas. The question should be whether there is something systematic within UNRWA to promote this.”
Struggle to stay afloat
UNRWA was struggling financially even before the Israeli allegations prompted major donors such as the US, Germany and Britain to suspend funding. The agency said last year that it started 2023 with a debts of $75 million carried over from 2022.
“You could say for the past decade, UNRWA has been going through a deep financial crisis for a number of reasons,” said Juliette Touma, UNRWA's Director of Communications.
One issue is UNRWA's financing model – it is an agency without a reserve, meaning it does not have a resource to tap into in an emergency.
“It's not a predictable and sustainable funding model,” Ms Touma said. For instance, only a handful of donors do so on a multiyear basis.
UNRWA suffered a major blow when the US, its biggest donor, slashed funding in 2018 on then-president Donald Trump's orders, although his successor, Joe Biden, restored the funding after taking office in 2020.
No viable alternative
The western officials who spoke to The National said that despite rising calls for the de facto destruction of UNRWA from legislators and other public figures in Europe and the US, no one wants to deal with the consequences, and that, they predict, will save the organisation.
One of the officials said there was “a lot of wheeling and dealing” in western capitals to find ways for the funding freeze not to affect UNRWA’s operations in the next three months, with most donors having released enough funds before the freeze to keep them running in the short term.
Another official said “the only thing stopping UNRWA from collapsing is that the West does not want to escalate the conflict by deepening the humanitarian disaster”.
“There is no other organisation within the international system to replace UNRWA,” he said.
He pointed out that the UNHCR, the UN's refugee agency, was seen as unsuitable because “it has done a lot of blunders in Syria”, by dealing with the regime of Bashar Al Assad. “There is no UN organisation that is clean.”
Another ray of hope of for UNRWA's continued existence is a split within the Israeli establishment on whether dismantling would be advantageous to Israel, according to the western officials.
Although Mr Netanyahu has repeatedly called for UNRWA to be replaced, Israeli security officials have been urging western nations to keep up the financing.
“They have made it clear that Israel has no readiness to jump into this as international law requires,” one of the officials said, referring to Israel's humanitarian obligations as an occupying power.
“There is a very strong split within the Israeli political system and security establishment.”
Israel has long objected to the existence of UNRWA, but more so as its governments shifted ever more to the right.
Its opposition is rooted in a long-term goal to undermine the right of return of Palestinians who fled or were forced to leave during Israel's creation in 1948.
However, the new allegations stem from a desire to deflect attention from its war in Gaza, according to multiple sources in the West and the Middle East.
They said that the allegations were released as the International Court of Justice delivered its initial opinion in the genocide case against Israel.
One of the officials said UNRWA had to address all Israeli allegations “however outrageous” because since October 7, fewer leaders in donor countries were willing “to spend political capital” in its defence.
An Arab official who deals with UNRWA said that although the organisation has come to be seen as a vehicle for Palestinian advancement, mainly by virtue of providing them with schooling, its existence had no bearing on the right of return.
“What the Israeli officials don’t get is that the right of return is an individual right that precedes UNRWA,” he said, pointing out international conventions and norms that pre-date UNRWA’s establishment in 1949.
“Even if UNRWA goes away, the right of return will not.”