UNRWA Faces Growing Challenges Amid Funding Shortfalls and Israeli Restrictions

The United Nations Relief and Works Agency for Palestine Refugees (UNRWA) is confronting escalating pressures that jeopardize its operational capacity, stemming from a funding crisis and Israeli restrictions impacting its facilities and activities. These challenges are compounded by calls to reorganize humanitarian aid delivery in the Palestinian territories. The repercussions extend beyond the agency's services, affecting its role in keeping the Palestinian refugee issue on the international agenda. Established by UN General Assembly Resolution 302 in December 1949, UNRWA was created to provide assistance and services to Palestinian refugees displaced during the 1948 Nakba. Since then, it has delivered education, healthcare, and relief services across Gaza, the West Bank including East Jerusalem, Jordan, Lebanon, and Syria, becoming a primary international institution for Palestinian refugees.

The agency relies heavily on voluntary donations, making its operations vulnerable to shifts in international funding priorities. For 2025, pledges amounted to approximately $878 million, with about $839 million actually received, highlighting a gap between commitments and disbursements and raising concerns about the system's ability to ensure stable funding. Insufficient funding impacts schools, health centers, and relief programs, upon which millions of refugees depend. Resource instability also hinders long-term planning and responsiveness to growing needs, particularly given the dire humanitarian situation in Gaza. Fears are mounting that financial crises and proposed measures like "administrative reform" and "expenditure rationalization" could be used to diminish the agency's role. While improving performance and controlling spending are not inherently contradictory to its mission, any changes weakening its ability to fulfill its UN mandate raise questions about their impact on refugee rights and the prominence of their cause.

Alongside financial woes, UNRWA faces increasing Israeli restrictions. Following laws passed by the Knesset in October 2024 and effective January 2025, limitations have been imposed on the agency's operations and its relations with Israeli authorities. In East Jerusalem, actions against UNRWA facilities escalated in January 2026, including the storming of its headquarters in Sheikh Jarrah and the demolition of buildings within the compound. These measures raise concerns about the agency's ability to continue providing services in the city and legal questions regarding the protection of UN premises, institutions, privileges, and immunities. The consequences of these restrictions go beyond material damage and service disruption, affecting a UN body's capacity to execute its General Assembly-mandated tasks and prompting international questions about ensuring its continued operation and protecting its facilities and staff.

The future of UNRWA remains tied to broader discussions about the Palestinian refugee issue, including proposals to reorganize humanitarian work in Gaza or transfer some of its tasks to other entities. While coordination mechanisms and aid delivery improvements can be explored, transferring services to alternative bodies does not automatically grant them UNRWA's established mandate. Ahmed Abu Holieh, Head of the Department of Refugee Affairs, stated that the Peace Council lacks the authority to alter UNRWA's mandate, emphasizing that only the UN General Assembly can review it. This stance is significant amid concerns that task transfers or service reductions could shift international engagement with the refugee issue from one of political and historical rights to a purely humanitarian one focused on basic needs.

However, UNRWA's continued operation is not a prerequisite for the right of return, nor does its cessation negate this right, which is based on independent legal and political references, including UN General Assembly Resolution 194. Weakening the agency could diminish the presence of an international institution linked to the refugee cause since 1949. The agency also faces challenges regarding staff safety, with reports indicating approximately 390 staff members killed since the war on Gaza began, highlighting the risks to humanitarian personnel and the need for their protection and enablement to continue services. International support for UNRWA must translate into practical measures ensuring sustainable funding, protecting its facilities and staff, and enabling it to fulfill its mandate. The Organization of Islamic Cooperation has reiterated the importance of preserving the agency's mandate based on Resolution 302 and rejecting any infringement on its status. UNRWA's challenges are intertwined: funding shortages, operational restrictions, and pressures regarding its future role. While improving performance and ensuring expenditure oversight are necessary, they should not compromise its service delivery capacity or its founding mandate. Protecting UNRWA means ensuring the continuity of essential services for Palestinian refugees and maintaining its role in the international system addressing their cause, without conflating humanitarian aid with a political solution guaranteeing their rights.