Israel passed a law on Monday banning the UN Palestinian refugee agency UNRWA from operating in the country, legislation that could impact its work in war-torn Gaza.

The 92 lawmakers who drafted the law cited what they described as the involvement of some UNRWA staffers in the October 7, 2023, attack on southern Israel and staffers having membership in Hamas and other armed groups.

The legislation has alarmed the United Nations and some of Israel's Western allies who fear it would further worsen the already dire humanitarian situation in Gaza, where Israel has been fighting Hamas militants for a year. The ban does not refer to operations in the Palestinian territories or elsewhere.

But what is UNRWA, why was it established, what does it do, why is Israel banning it, and what could the fallout be from its decision?

 

UNRWA's formation

The United Nations Relief and Works Agency for Palestine Refugees in the Near East was set up by the UN in December 1949, following the so-called Nakba (meaning 'catastrophe' in Arabic) of the previous year. 

The Nakba refers to the mass displacement and dispossession of Palestinians during the 1948 Arab-Israeli war. In 1947 the UN General Assembly passed a resolution partitioning Palestine into two states, one Jewish and one Arab, with Jerusalem under a UN administration. 

The Arab world rejected the plan as unfair and the situation escalated into a full-blown war in 1948, with the end of the British Mandate and the departure of British forces, the declaration of independence of the State of Israel and the entry of neighboring Arab armies. After Israel emerged successful from the fighting, more than half the Palestinian population was permanently displaced.

UNRWA was formed to carry out direct relief and works programs for Palestinian refugees, beginning operations in May 1950.

According to the UNRWA website: "In the absence of a solution to the Palestine refugee problem, the General Assembly has repeatedly renewed UNRWA's mandate, most recently extending it until 30 June 2026."

 

Who funds it?

It's funded almost entirely by voluntary contributions from UN member states, with the U.S. and Germany its largest donors, followed by the EU and UK.

UNRWA's most recent reported figures showed total pledges of $1.46 billion for 2023. It also receives a limited subsidy from the Regular Budget of the United Nations, used exclusively for administrative costs.

However, the organization faced a funding crisis earlier this year after revelations that UNRWA members were among the instigators of Hamas's brutal October 7, 2023 attacks on Israel in which 1,189 people were murdered and 251 taken hostage.

The UN itself commissioned a report that said nine UNRWA staff members may have had a role in the attack and dismissed them for their posts. 

The scandal resulted in suspension of funding from various UNRWA donors. While the EU, France and Germany have since resumed funding, the U.S. passed legislation disallowing funding until at least March 2025.

What does UNRWA do?

UNRWA employs 32,000 personnel across the region who are largely embedded in the Palestinian community, providing services for 5.9 million registered refugees covered by its protective mandate. It runs 58 recognized Palestinian refugee camps - eight in Gaza, 19 in West Bank, 12 in Lebanon, 10 in Jordan 10 and nine in Syria. 

It also runs 706 schools and 140 primary health facilities, with more than 7 million annual visits to UNRWA clinics across the region. 

The organization distributes basic food supplies and offers loans and emergency cash grants. 

UNRWA's website states: "UNRWA is unique in terms of its long-standing commitment to one group of refugees. It has contributed to the welfare and human development of four generations of Palestine refugees, defined as 'persons whose normal place of residence was Palestine during the period 1 June 1946 to 15 May 1948, and who lost both home and means of livelihood as a result of the 1948 War.' 

"The descendants of Palestine refugee males, including legally adopted children, are also eligible for registration." 

 

Why has Israel banned it?

Israel has long demanded UNRWA's closure, accusing it for many years of anti-Israeli incitement. 

Prime Minister Benjamin Netanyahu has described the agency as "perforated by Hamas". In a statement on X after the law was passed, he wrote: "UNRWA workers involved in terrorist activities against Israel must be held accountable." 

Since its birth in 1948, Israel has consistently denied Palestinians their right of return, despite its membership of the UN being conditional upon Palestinian refugees being allowed to return to their homes and land.

Israel believes UNRAW is obsolete, calling its continuing support of the descendants of those initially displaced an impediment to a peace settlement.

What is the possible fallout?

According to RT, Israeli Foreign Ministry officials have warned that the ban and a severance of ties with UNRWA could constitute a violation of the UN Charter, potentially resulting in Israel's expulsion from the United Nations.

UN Secretary-General Antonio Guterres issued a damning response to the law's announcement. He said: "The implementation of the laws could have devastating consequences for Palestine refugees in the Occupied Palestinian Territory, which is unacceptable." 

Guterres demanded Israel "act consistently with its obligations under the Charter of the United Nations and its other obligations under international law."

Chinese envoy to the UN, Fu Cong said Beijing was "firmly opposed to this decision." He added: "This is an outrageous decision and we do believe that UNRWA has played a key role in maintaining a lifeline for the Palestinian people in Gaza." 

UK Prime Minister Keir Starmer said the legislation "risks making UNRWA's essential work for Palestinians impossible."

The governments of the four European countries – all of which have recognised Palestinian statehood – issued a joint statement condemning the Knesset's targeting of the agency.

Vasily Nebenzia, Russia's UN ambassador, described Israel's UNRWA ban as "terrible".

The U.S. state department said it was "deeply concerned" by the law. U.S. state department spokesperson Matthew Miller told a briefing: "UNWRA plays a critical, important role in delivering humanitarian assistance to civilians that need it in Gaza."

Australia, Switzerland, Belgium and Jordan were among other countries to issue condemnation.