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The Trump administration is weighing terrorism-related sanctions against the U.N. Palestinian refugee agency UNRWA, according to sources familiar with internal discussions. The move has sparked significant legal and humanitarian concerns within the State Department, as UNRWA provides essential relief, education, healthcare, and shelter to millions of Palestinians across Gaza, the West Bank, Jordan, Lebanon, and Syria. The agency has been described by top U.N. officials as central to humanitarian operations in Gaza, which remains devastated by two years of war between Israel and Hamas.
Washington, once UNRWA’s largest donor, halted funding in January 2024 after Israel alleged that several UNRWA staff took part in the October 7, 2023 Hamas attack. The agency denies institutional wrongdoing and notes that independent investigations—including one by the U.S. National Intelligence Council—concluded UNRWA remains a neutral, indispensable humanitarian body. Still, some U.S. officials, including Secretary of State Marco Rubio, have accused the agency of harboring ties to Hamas.
Among the sanction options discussed is labeling UNRWA a Foreign Terrorist Organization (FTO), one of the most severe U.S. counterterrorism tools. Such a designation could isolate the agency financially and disrupt critical aid operations. It could also create diplomatic complications for U.S. allies that fund UNRWA. While nine staff members suspected of involvement in the 2023 attack were dismissed, the U.N. says Israel has yet to provide supporting evidence for broader allegations.
Career officials have warned that sweeping sanctions could violate legal norms and deepen Gaza’s humanitarian crisis. Politically appointed staff, however, continue to push for strong measures. No final decision has been made, but the possibility has intensified debate inside the State Department. As Israel maintains restrictions on UNRWA operations, more than 370 agency workers have been killed during the conflict, underscoring the immense risks facing humanitarian personnel in the region.
