The U.N. Relief and Works Agency for Palestine Refugees (UNRWA) is suffering a severe financial crisis that has apparently forced it to cut costs, worrying Palestinian refugees in the Gaza Strip who depend to a large extent on the agency's assistance. On June 15, U.N. Commissioner-General Pierre Krähenbühl announced that the agency's fiscal deficit for the current year had reached $101 million, while adding that the U.N. remained committed to providing badly-needed services for Palestinian refugees. Samaan Khalifa, 47, a father of nine who lives in a two-room home in Gaza, however, is nevertheless concerned. "This talk of UNRWA's financial crisis has made us nervous," Khalifa told Anadolu Agency, saying he especially feared the prospect of reduced health and educational services traditionally provided by the refugee agency.

Marwa Obeid, 45, likewise expressed fear that the crisis could affect the health sector and the distribution of aid to needy families in Gaza. She added that she and her friends had noticed a recent reduction in the health and educational services provided by UNRWA. "UNRWA had been distributing $20 in cash assistance for students at UNRWA schools in the Gaza Strip, which my children had benefited from," she said. "Recently, however, this has completely stopped, along with the daily meals provided to students, which ended after Israel's last war against Gaza [in mid-2014]," Obeid added. Aid provided by UNRWA, she said, was the "only reason" why her and her family were still alive, due to her husband's numerous health problems. Bilal Mekdad, 52, who lives in the Al-Shati refugee camp in the northern Gaza Strip, for his part, lamented: "Our conditions worsen every day; we fear the day we will find ourselves in the street."

In a statement to Anadolu Agency, Adnan Abo Hasna, the UNRWA's spokesman in the Gaza Strip, said the agency's current fiscal deficit may soon force it to close as many as 700 schools in the five areas that it operates in, namely, the Gaza Strip, the West Bank, Lebanon, Syria and Jordan, which collectively host some half million Palestinian children. "So far, there is no official decision to close any school," he said. "But the fiscal deficit may lead us not to open the schools and receive students next year." According to Abu Hasna, the UNRWA's 252 schools in the Gaza Strip – which offer services to about 248,000 Palestinian students, will face possible closure if the fiscal deficit isn't resolved. On June 29, the UNRWA announced that some 85 percent of its international staff's 137 employees who work short-term contracts would be laid off, describing the move as a "phased process" that would be continued until the end of September. In the same month, the agency also announced that voluntary retirement would be open to some employees in an effort to reduce expenses. The move came, the UNRWA said in a statement, "within the procedures followed to reduce internal costs while ensuring the continued provision of service for Palestinian refugees." It also coincided, the agency added, "with the obvious decline of financial support from donor countries."

Essam Odwan, head of refugee affairs for Gaza-based Palestinian resistance movement Hamas, for his part, urged the UNRWA to look for new donors. "The lives of Palestinian refugees are at risk because of reductions and the [UNRWA's] financial deficit," Odwan told Anadolu Agency. "The UNRWA must find new donors to continue providing Palestinian refugees with the needed humanitarian services and aid," he said. Abdel Sattar Qassem, professor of political science at the West Bank's Birzeit University, meanwhile, believes the UNRWA crisis may be of a "political" nature. "The donors' failure to meet their commitments could be due to regional and international schemes aimed at reducing the agency's activities and terminating its services," he told Anadolu Agency. He added: "This would ultimately mean the end of the cause of the Palestinian refugees." According to the U.N. estimates, refugees in the Gaza Strip current account for nearly 1.3 million of the strip's roughly 1.8 million inhabitants, with the figure expected to rise to some 1.5 million by 2020.

Notably, a recent Israeli report called for the speedy termination of UNRWA's activities in the West Bank and Gaza, describing the refugee agency's current financial crisis as a "golden opportunity" to bring this about. The report, prepared by Israel's Institute of Strategic Studies and published in June by Israeli Hebrew-language daily Maariv, pointed out that the termination of the UNRWA's activities would serve to "eliminate the ‘right of return' [for Palestinian refugees] and dispelling the hope of refugees of ever returning to their homes [in historical Palestine]." When asked about the issues raised in the Israeli report, however, Abo Hasna insisted there were no plans to end the agency's activities. "The agency will continue working until a just solution is found to the refugees' plight," he said. He went on to concede, however, that "there is a real crisis because of the increasing numbers of refugees [in the region] and because donors aren't obliged to meet their financial pledges." Since 2007, the Gaza Strip has groaned under a tight blockade by Israel and Egypt that has deprived many of the coastal enclave's inhabitants of the most basic commodities, including food, fuel and medicine. And in July and August of last year, Israel carried out a weeks-long military onslaught against Gaza, which, along with killing over 2,160 Palestinians, reduced much of the strip's civilian infrastructure to rubble.