UN agency aiding millions of Palestinians is in jeopardy—and there’s no plan B

Hundreds of thousands of other Palestinians in Gaza and the West Bank live in communities administered by the United Nations Relief and Works Agency, or Unrwa, which delivers municipal services from trash collection to social services and provides aid and small-business loans.

Israel last week passed laws aimed at halting those operations. There is no plan B.

“We are really in uncharted territory," said Roland Friedrich, director of Unrwa affairs in the West Bank. He said the U.N. had never had a member state take such strong legal steps to effectively ban the work of one of its major agencies.

The laws are the culmination of a battle that has been brewing since the months after the Oct. 7, 2023, attack in which Israel accused about a dozen Unrwa employees of taking part. The U.N. fired several employees and investigated others, but its efforts haven’t satisfied Israeli concerns about militants’ presence in Unrwa’s ranks, made up mostly of Palestinians.

The legislation, which the U.N. says violates international law, bars Unrwa from working in Israel and East Jerusalem and forbids Israeli officials from having contact with it. That could effectively block Unrwa activity in the Palestinian territories as well because the agency would be unable to obtain visas, use Israeli-held crossing points and ensure diplomatic protections for its staff, U.N. officials say.

They say that if the laws are implemented at the end of a 90-day transition period, some 380 schools and 65 healthcare facilities will stop functioning and humanitarian aid and municipal services will cease. Vital logistical support to other U.N. agencies and international groups providing humanitarian support in Gaza will also grind to a halt.

Aid groups say Unrwa’s wide-ranging responsibilities make it irreplaceable, and trying to fill the gap would be more costly. “We will never be able to pick that up, so the additional strain it puts on the system in terms of people in need, children in need and our ability to compensate for that is completely magical thinking," said Janti Soeripto, president and CEO of Save the Children US, which has about 100 staff in Gaza.

The U.N. doesn’t have a contingency plan for Unrwa’s incapacitation or means of preventing the Israeli laws from taking effect. Norway said it would ask the General Assembly, which comprises all 193 member states, to seek a ruling from the International Court of Justice on whether the legislation violates international law. That could lead to a temporary injunction, though Israel has ignored previous orders.

“This is not something that can stand and we have to do everything that we can to fight against this," said Norway’s deputy foreign minister, Andreas Kravik, adding that only the U.S. can realistically get Israel to rethink the legislation.

The Biden administration has said it opposes the laws, but hasn’t indicated willingness to take action against Israel, a close ally, to stop them. State Department spokesman Matthew Miller said last week that the U.S. would engage with Israel and monitor the impact of any legal challenges.

The new laws have overwhelming Israeli support. Two-thirds of the legislators in the fractious Knesset backed them, though some Israeli diplomats and defense officials expressed concerns about neutering Unrwa without alternative plans.

The fight is part of a long-running conflict between the U.N. and Israel. Israel has accused many of the U.N.’s bodies of unfairly scrutinizing it or of displaying other bias against the state throughout the years. The U.N. has alleged that Israel flouts international law.

In the case of Unrwa, some Israeli politicians have said that teaching materials used in Unrwa schools contribute to a bias against Israel among Palestinians. More broadly, some say the welfare network it provides creates a disincentive for Palestinians to leave refugee camps and keeps alive dreams of returning to where their families were exiled from, in what is now the state of Israel.

The U.N. created Unrwa to protect Palestinian refugees displaced by the 1948 war as the state of Israel was established. A separate U.N. decision said refugees should be allowed to return to their homes.

Unrwa began as a small agency providing tents, food and other relief. Its staff has grown to 30,000, nearly all Palestinians, with operations in Gaza, the West Bank, Jordan, Lebanon and Syria that serve about six million Palestinian refugees and their descendants. Western nations pay for most of its $1.3 billion budget.

Israeli concerns about Unrwa intensified after the Oct. 7 attacks. The Unrwa bills were introduced in February. Israel’s allegations against Unrwa employees prompted 16 countries, including the U.S., to suspend funding to the organization. All of them, except the U.S., have since restored it.

“Unrwa is totally infiltrated with Hamas," Israeli Prime Minister Benjamin Netanyahu said in January, adding that the agency should be scrapped and replaced by other U.N. or aid agencies that would operate in a neutral fashion.

Israeli intelligence estimates that 10% of the agency’s 12,000 staff in Gaza are affiliated or have membership in Hamas or Palestinian Islamic Jihad and half the employees have a close relative with an active membership in the militant groups. Since Hamas has both a military and political wing, affiliation doesn’t mean membership in the armed group.

The U.N. has denied that there are a large number of militants in Unrwa’s ranks, saying Israel has brought it information about a fraction of its employees. A U.S. intelligence assessment earlier this year found that it was likely that some Unrwa employees took part in the Oct. 7 attack but it couldn’t confirm Israel’s allegations that a large number of Unrwa staff have links to militants. The U.S. said Israel hadn’t shared the raw intelligence behind its assessment.

In July, Israel sent a letter to Unrwa Commissioner-General Philippe Lazzarini with a list of more than 100 names and ID numbers of what Israel said were Hamas militants employed by Unrwa, asking for their termination, an Israeli Foreign Ministry official said.

Lazzarini responded that Unrwa needed specific evidence to take action, according to his letter which was seen by The Wall Street Journal. Israel hasn’t shared the underlying intelligence with Unrwa, deeming it a security concern.

Asked about the letter from the Israelis, Unrwa spokeswoman Tamara Alrifai said: “We asked the government of Israel for more information to enable us to pursue and did not get anything."

The U.N. says Israeli attacks are aimed at discrediting it and warns that the Israeli laws undermine its work around the world by allowing a member state to ban a U.N. agency from operating.

The impact of the Israeli legislation would be felt first in Gaza, where nearly the entire population is displaced and faces extreme hunger and disease. The international humanitarian response would likely collapse because most other humanitarian actors rely on Unrwa’s infrastructure for key supplies including fuel, said Alrifai.

“It’s the trucks, it’s the warehouses, it’s the shelters where the services are provided, it’s the staff," she said. “It’s also the information that we have, the access we have into the community."

In the West Bank, Unrwa’s municipal services would be difficult for local authorities to absorb. The nominal government, the Palestinian Authority, is already in a financial crisis and struggling to meet people’s basic needs, with the World Bank predicting a nearly $2 billion budget deficit this year.

“I don’t know how Israel believes this will play out when the Palestinian Authority is under immense pressure, hardly able to survive and has no money, and as the West Bank’s unemployment stands at over 30% with unemployment in some of the camps over 65%," said Friedrich. “If you pull out Unrwa, how can this lead to more stability?"

Friedrich said various armed Palestinian political groups could seek to exploit the increased poverty and lack of governance structure that will result from Unrwa’s forced absence.

Anyone seeking to replace Unrwa would also face a dilemma about whether to retain the agency’s experienced Palestinian staff, which Israel alleges is rife with Hamas connections, or replace them with foreigners, which would cost more and present additional risk. The U.N. also has yet to bolster vetting to combat militant infiltration beyond sharing staff identities with Israel, which Unrwa says it has done for years.

“If the Israelis have a problem with the Unrwa teachers, where are we going to get those hundreds of teachers?" said one U.N. official. If another entity rehires former Unrwa teachers and rebrands them, “does that mean that all [Israel’s] criticism towards Unrwa staff is moot?"

Omar Abdel-Baqui contributed to this article.

Write to Stephen Kalin at stephen.kalin@wsj.com