UN says its relief agency nearing breaking point due to deep cost-cutting measures

U.N. Secretary-General Antonio Guterres on Tuesday urged member states to urgently close a $100 million funding gap for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), warning that the agency is approaching a critical breaking point amid deep budget cuts and austerity measures.

Speaking at an ad hoc meeting of the U.N. General Assembly on voluntary contributions, Guterres said UNRWA’s financial situation had become increasingly precarious due to widespread operational restrictions across the occupied Palestinian territories, combined with a significant shortfall in funding.

UNRWA operates in Gaza, the West Bank, Lebanon, Jordan, and Syria, providing education, healthcare, social services, emergency relief, and shelter assistance to approximately 2.6 million Palestinian refugees.

The United States, once UNRWA’s largest donor, suspended its funding in January 2024 after Israel alleged that around a dozen UNRWA employees were involved in the October 7, 2023 Hamas-led attack that triggered the Gaza war. Several other major donors temporarily paused contributions pending investigations, while some—including Sweden—reduced or adjusted funding levels for 2025. Most donors have since resumed support, though overall financing remains strained.

Guterres warned that the agency’s ongoing liquidity crisis is undermining its ability to carry out its mandate, which was renewed by the General Assembly just six months ago with broad member state support.

“They cannot keep going like this without urgent backing and financial support from member states,” he said, noting that UNRWA has already implemented reforms, including updates to its neutrality policies and oversight of political activities following the allegations raised by Israel.

He also described UNRWA as a “stabilizing force in an age of instability,” while rejecting what he called continued efforts to weaken the agency through disinformation, political pressure, legal restrictions, and operational constraints.

According to Guterres, the worsening conditions have put both Palestinian civilians and humanitarian workers at risk. He said 390 UNRWA staff members have been killed in Gaza since October 2023.

The United Nations has also acknowledged internal disciplinary action, saying nine UNRWA staff members were dismissed over possible involvement in the October 7 attack, which killed about 1,200 people in Israel and other foreign nationals. The U.N. has said it is continuing to investigate all allegations and has denied organizational ties to Hamas.

UNRWA has already reduced service delivery hours by 20 percent this year, cut salaries for local staff, and left roughly 15 percent of international posts vacant. “Any further cuts could push conditions past the breaking point,” Guterres warned.

U.N. spokesperson Stéphane Dujarric said the agency is facing an existential crisis, adding that the outcome of the donor meeting would be announced on Wednesday.

According to UNRWA financial data, the agency received about $887 million in pledged support and $829 million in actual contributions in 2025—covering only about 27 percent of its total required budget of $3.3 billion. -Reporting by Andrea Shalal; Editing by Paul Simao/Reuters