The U.N. agency for Palestinian refugees has almost closed a funding gap caused by the loss of $300 million in U.S. contributions, its chief said on Thursday.

The Trump administration pulled the bulk of U.S. funding of the U.N. Relief and Works Agency (UNRWA) in January after a U.N. General Assembly vote rejected Washington's recognition of Jerusalem as Israel's capital. Since President Donald Trump's move, the EU has become UNRWA's largest single donor, according to UNRWA chief Pierre Kraehenbuehl. He told reporters that the U.S. funding cut had made 2018 a very difficult year for UNRWA, which runs schools and clinics for 5.4 million Palestinians across the Middle East, including in Gaza and the West Bank.

It began 2018 with a shortfall of $146 million in its planned budget of $1.2 billion. That ballooned to $446 million after Trump's cutback, forcing Kraehenbuehl to seek new funds from other countries and private sector donors. "We decided not to sit back and complain but to reach out and launch a global campaign called ‘dignity is priceless," and that really mobilized the international community," he said.

UNRWA was set up in 1950 to help Palestinian refugees who lost their homes because of the 1948 Middle East conflict. Its assistance includes schools, healthcare centers and food distribution. The agency earlier said all 711 schools it runs for 526,000 pupils in Gaza and the West Bank, Jordan, Lebanon and Syria reopened in September despite the $300 million U.S. funding cut.

"We have mobilized until now $382 million of additional funding, which means we brought the shortfall down to $64 million, and we are still in contact with a number of countries; we are hopeful that this shortfall will be brought down further in couple of weeks," said Kraehenbuehl. He added that it was at least good to have a greater geographical spread of donors more representative of the United Nations as a whole. But new donations would have to be stabilized to keep UNRWA funded next year and in future years. "We're not out of the woods [yet]," he said.

Trump's endorsement in December of Israel's claim to Jerusalem as its capital drew universal condemnation from Arab leaders and criticism around the world. It broke with decades of U.S. policy that the city's status must be decided in peace negotiations between Israel and the Palestinians.