Jerusalem's mayor said Thursday he plans to remove a U.N. agency for Palestinian refugees from the city, accusing the body of operating illegally and promoting incitement against Israel.

Nir Barkat said schools, clinics and sports centers, among other services operated by UNRWA in east Jerusalem, will be transferred to Israeli authorities. The municipality did not provide an exact timeline but it said schools serving 1,800 students would be closed by the end of the current school year.

Barkat, who is set to step down following municipal elections at the end of the month, said the U.S. decision to cut $300 million in aid to the agency earlier this year prompted the move.

"The U.S. decision has created a rare opportunity to replace UNRWA's services with services of the Jerusalem Municipality. We are putting an end to the lie of the ‘Palestinian refugee problem' and the attempts at creating a false sovereignty within a sovereignty," Barkat said in a statement, claiming the schools and clinics were illegal and operate without an Israeli license, as reported by The Associated Press. Jerusalem's municipality said the move was coordinated with the Israeli government.

The United States had made drastic cuts to its contribution to the UNRWA in January. Relations between the U.S. administration and the Palestinian Authority took a nosedive after Trump in December decided to recognize the disputed city of Jerusalem as Israel's capital. The Palestinians have suspended contacts with Washington and believe it can no longer be an impartial mediator in the Middle East peace process.

UNRW said earlier all 711 schools it runs for 526,000 pupils in Gaza and the West Bank, Jordan, Lebanon and Syria would reopen in the next few days despite the $300 million U.S. funding cut. Fears raised by U.N. Secretary-General Antonio Guterres that the schools might not be able to reopen at all failed to materialize, but the UNRWA warned it might still be forced to close them again in a month if additional new funding is not found.

UNRWA was established in the wake of the 1948 Mideast war surrounding Israel's creation. An estimated 700,000 Palestinians fled or were forced from their homes in the fighting. In the absence of a solution, the U.N. General Assembly has repeatedly renewed UNRWA's mandate. The agency now provides education, health care and social services to more than 5 million refugees and their descendants. It serves populations in Gaza and the West Bank, as well as Jordan, Lebanon and Syria.