FIRST AIRED: January 18, 2018

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00:00:01
>> The Trump administration's decision to drastically cut aid to Palestinian refugees could put a humanitarian crisis on Israel's doorstep. The US will provide less than half of its normal funding to the United Nations Relief and Works Agency, holding back $65 million. A move that the UN says will hit food, healthcare and education for over 1 million people in Gaza alone.
00:00:28
Dan Williams is in the Reuters Jerusalem bureau.>> The Trump Administration's demand that UNRWA undergo a review and possibly a redefinition is not new. It's basically a dedicated refugee agency for one refugee community, the Palestine Arab refugees of the 1948 war, in which Israel was created. The mechanism has evolved in a way that the refugee status, as defined by UNRWA for Palestinian refugees is generational, it extends to the descendants.
00:00:56
Well this is something Israel, and it appears US officials now say it's hard to justify especially when it comes to US outlay in terms of finance.>> There's also allegations levied by Israel that UNRWA is a source of employment for militant elements. They say it's duty should be folded into the UN's larger global refugee program.
00:01:19
But violence has seethed since Trump's declaration of Jerusalem as Israel's capital back in December. His former pledge of bringing peace to the region now appears to be out the window.>> We've been noticing a bit of nuance on the Israeli side. The current prime minister, Benjamin Netanyahu, appears to be somewhat hesitant.
00:01:37
The Israeli misgivings appear to be linked to a recognition that whether they like it or not, UNRWA sustains much of life in the Gaza Strip. Were it to lose its funding overnight, essentially you would have large numbers of people in that already impoverished enclave. Teachering into outright humanitarian crisis, which in turn could lap up against Israel's borders, Gaza's a very small place.
00:01:59
>> A US official told Reuters that some of Trump's aides originally demanded cutting all funding, but opposing voices said it was too risky.