The Trump administration is reportedly contemplating the application of terrorism-related sanctions against the United Nations agency that provides relief to Palestinian refugees. According to two insiders familiar with the situation, discussions have advanced concerning potential sanctions on the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). Israeli officials have long accused the agency of supporting Hamas, particularly in connection with the October 7, 2023 attack. UNRWA operates across Gaza, the West Bank, Lebanon, Jordan, and Syria, delivering essential services like aid, education, healthcare, social support, and shelter to millions of Palestinians.

Leading UN representatives and the UN Security Council have described UNRWA as crucial for delivering aid in Gaza, especially following the humanitarian crisis sparked by the ongoing two-year conflict between Israel and Hamas. However, the Trump administration has aligned itself with Israel, which has alleged that UNRWA has ties to Hamas. In January 2024, the U.S. halted its funding to the agency after Israel accused several UNRWA employees of participating in the terror attack. Additionally, in February, President Trump signed an executive order asserting that ‘UNRWA has reportedly been infiltrated by members of groups long recognized by the Secretary of State as foreign terrorist organizations, and some of its employees were involved in the October 7, 2023 Hamas attack on Israel.’

When the International Court of Justice called on Israel in April to collaborate with UNRWA, the Trump administration maintained its support for Israel. It asserted that Israel was not obliged to cooperate with the agency and had ‘ample grounds to question UNRWA’s impartiality,’ as reported by Fox News. U.S. Secretary of State Marco Rubio, in October of this year, accused UNRWA of effectively becoming a ‘subsidiary of Hamas,’ a group the U.S. designated as a terrorist organization in 1997. Rubio stated, ‘UNRWA’s not going to play any role in it,’ referring to the agency’s potential involvement in delivering aid to Gaza. He added, ‘The United Nations is here. They’re on the ground. We’re willing to work with them if they can make it work, but not UNRWA.’

It is not clear whether the current discussions are focused on sanctioning the entire agency – or just specific UNRWA officials or parts of its operations, and it appears US officials have not settled on the precise type of sanctions they would deploy against the agency. Among the possibilities that State Department officials have discussed include designating UNRWA a ‘foreign terrorist organization,’ or FTO, sources said. Doing so, though, would be highly unusual as the United States is both a member and the host country of the United Nations, which created the United Nations Relief and Works Agency in 1949. William Deere, director of the UNRWA office in Washington, said the agency would be ‘disappointed’ if US officials were in fact discussing an FTO designation. He said such a move would be ‘both unprecedented and unwarranted.’ 

‘Since January 2024, four independent entities have investigated UNRWA’s neutrality including the US. National Intelligence Council. While occurring at different times and from different perspectives, they have all come to the same conclusion: UNRWA is an indispensable, neutral, humanitarian actor,’ he argued. The agency had announced in August 2024 that the Internal Oversight Services investigated 19 employees suspected of being involved in the October 7 attack. It admitted that nine employees ‘may have been involved’ and were fired from their positions in the organization. The investigation also found that ‘in one case, no evidence was obtained by OIOS to support the allegations of the staff member’s involvement, while in nine other cases, the evidence obtained by OIOS was insufficient to support the staff member’s involvement.’ A Hamas commander in Lebanon – killed in September by Israel – was also found to have had a UNRWA job.

The UN has since vowed to investigate all accusations made and has repeatedly asked Israel for evidence, which it says has not been provided. If the Trump team now makes a blanket move against the entire organization, its supporters say, it would throw refugee relief efforts into disarray and cripple UNRWA – which is already facing a funding crisis. Another concern the Trump administration must consider is the fact that dozens of key US allies provide funding to UNRWA – raising questions about whether foreign officials could face sanctions for aiding a group Washington has declared a ‘foreign terrorist organization.’ It now remains unclear whether the Trump administration is seriously considering designating the agency a ‘foreign terrorist organization,’ which is generally reserved for groups who kill civilians, like branches of Islamic State and al-Qaeda.

There are other sanctioning options the State Department and other federal agencies could utilize instead, allowing for asset freezes and travel bans targeted at specific individuals and entities. A State Department official, though, called UNRWA a ‘corrupt organization with a proven track record of aiding and abetting terrorists.’ ‘Everything is on the table,’ the official told Reuters. ‘No final decisions have yet been made.’ Those who are aware of the UNRWA discussions, who spoke on the condition of anonymity to disclose the non-public deliberations, said the push to hit UNRWA with terrorism-related sanctions is being driven by politically-appointed staff at the State Department.

Many career State Department officials – including some lawyers responsible for drafting designations language – have pushed back, those sources added, as they expressed their humanitarian and legal concerns given the organization’s singular role in aiding Palestinians. Still, one of the sources said, the potential sanctions have been discussed in recent weeks by officials in the State Department’s Bureau of Counterterrorism and members of its Policy Planning Staff, a powerful internal policymaking entity. Gregory LoGerfo, the nominee for the department’s top counterterrorism post, has recused himself from the UNRWA discussions while he awaits Senate confirmation, that source added. Israeli Prime Minister Benjamin Netanyahu has for years called for UNRWA to be dismantled, accusing it of anti-Israeli incitement.