A boy sits near the sacks of flours during a food aid distribution by the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). Photo: Ali Jadallah / Anadolu Agency / Getty Images

The Trump administration has decided to continue freezing $65 million of the annual funding it gives the United Nations Relief and Works Agency, which provides aid to Palestinian refugees — but it will release $60 million to the organization for "urgent humanitarian needs," U.S. officials say.

Between the lines: The decision was a compromise. Axios reported earlier this month that the Trump administration froze $125 million of the annual funding to UNRWA, which was supposed to be transferred to the organization by Jan. 1, in retaliation for Palestinian protests against President Trump's decision to recognize Jerusalem as the capital of Israel.

The back story: In the last 10 days there were interagency discussions about whether to release the funding, cut it completely or partially unfreeze it.

The State Department and the Pentagon were in favor of releasing the money, and stressed that further freezing it might destabilize the situation in the Palestinian refugee camps in Lebanon, Jordan and Gaza. On the other hand, U.N. ambassador Nikki Haley and several White House officials supported freezing the funding.

What they're saying:

  • U.S. officials say that out of the $125 million that was frozen, $60 million will be released and transferred to the program budget of UNRWA "to help sustain schools and health services by ensuring teachers' and health care providers' salaries continue through UNRWA's operations in Jordan and the West Bank/Gaza."
  • A senior U.S. official said: "Without the funds we are providing today, UNRWA operations were at risk of running out of funds and closing down.  The funds provided by the United States will prevent that from happening for the immediate future".
  • On the other hand: An additional $65 million will be held for future consideration, the U.S. official added. He said that there is a need "to undertake a fundamental reexamination of UNRWA, both in the way it operates and the way it is funded".
  • What to watch: The official added that the United States should not be asked to bear a disproportionate share of these costs.

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