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Geneva (AFP) – The head of the UN agency for Palestinians criticised Tuesday the “political dimension” of a US decision to dramatically slash funding to the organisation, warning this could lead to rising instability.

Pierre Krahenbuhl said the US decision to reduce funding for the United Nations Relief and Works Agency (UNRWA) this year by $300 million (240 million euros) “has a political dimension that I think should be avoided”.

He made these comments while issuing an emergency appeal for more than $800 million in funds to provide additional assistance to Palestinian refugees in Syria, Gaza and the West Bank.

The United States, which for years has by far been UNRWA’s largest donor, announced this month it will be contributing just $60 million to the organisation’s 2018 budget, down from $360 million last year.

“It is very clear the decision by US was not related to our performance,” Krahenbuhl said, pointing out that he had a “positive” meeting with US President Donald Trump’s son-in-law Jared Kushner last November and had been left with the impression Washington would maintain its funding levels.

Krahenbuhl said the cuts were clearly linked to the Palestinian leadership’s decision this month to freeze ties with Trump’s administration after its controversial recognition of Jerusalem as Israel’s capital.

The Palestinians, who see east Jerusalem as the capital of their future state, have said Washington could no longer be the main mediator in talks with Israel after the move.

Krahenbuhl stressed the “imperative to preserve and ensure that humanitarian funding is preserved from politicisation”.

– Worst financial crisis ever –

“The whole point of supporting communities in very difficult conflict environments is that one doesn’t have to agree with anyone’s leadership. One is concerned with the well-being … of communities.”

He underlined that UNRWA provides essential services to some 5.3 million Palestinian refugees across Jordan, Lebanon, Syria, West Bank and the Gaza Strip, including running 700 schools and 140 health clinics.

“It is not the first time in our long and proud history that we face challenges of this nature, but it is in financial terms the most serious financial crisis ever in the history of this agency,” he said.

Cuts to these and other services for populations often already in dire need and lacking any possibilities to move or to improve their situations could be a recipe for disaster, he warned.

“There is no doubt that if no solution is found to the shortfall… then there will be increased instability,” Krahenbuhl said.

“Cutting and reducing funding to UNRWA is not good for regional stability.”

Following the US move, UNRWA last week launched a global fundraising campaign, titled “Dignity is Priceless”, to help fill the gaps.

And Krahenbuhl said other donor countries were rushing to provide their donations early to ensure services could continue while the organisation works to bring in more cash.

Denmark, Finland, Germany Norway, Russia, Sweden and Switzerland had already provided their annual donations in full, while Belgium, Kuwait, Netherlands and Ireland had vowed to do so “very soon”, he said.