Israeli Prime Minister Benjamin Netanyahu on Sunday called for dismantling the United Nations agency created to help Palestinian refugees and supports a cut in US funding for it, but prefers it be carried out gradually, a senior Israeli official said on Saturday.
Netanyahu's public comments, at a weekly cabinet meeting, came days after US President Donald Trump threatened to withhold future aid payments to the UN Relief and Works Agency (UNRWA) over what he called the Palestinians’ unwillingness to talk peace with Israel.
The idea, condemned as blackmail by Palestinians, was initially met with mixed reactions in Israel, with some officials warning of the dangers in cutting off financial assistance to the Palestinians.
“Prime Minister (Benjamin Netanyahu) supports a gradual cut to UNRWA,” Reuters quoted the senior Israeli official as saying.
Israel has long viewed UNRWA as biased against it, an allegation the agency strongly denies, saying it is only providing necessary services to Palestinians.
Israeli officials also criticize the agency's method of classifying refugees, with descendants also eligible to register.
"UNRWA is an organization that perpetuates the Palestinian refugee problem," Netanyahu said while also lauding Trump at the beginning of his weekly cabinet meeting.
He said that while millions of other refugees around the world were cared for by the office of the UN High Commissioner for Refugees (UNHCR), the Palestinians have their own body which also treats "great-grandchildren of refugees -- who aren't refugees".
"This absurd situation must be ended," Netanyahu said.
UNRWA spokesman Chris Gunness said that its mandate came from the UN General Assembly "whose members give wide and strong support to the agency's humanitarian and human development mission".
"What perpetuates the refugee crisis is the failure of the parties to deal with the issue," he wrote in a statement.
"This needs to be resolved by the parties to the conflict in the context of peace talks, based on UN resolutions and international law."
In June, Netanyahu said he had raised the issue with Washington's UN envoy Nikki Haley.
On Wednesday, Trump threatened to cut aid worth more than $300 million annually to the Palestinians in a bid to force them to negotiate.
The United States has long provided the Palestinian Authority with much-needed budgetary support and security assistance, as well as an additional $304 million for UN programmes in the West Bank and Gaza.
UNRWA runs hundreds of schools for Palestinian refugees in the Gaza Strip, the occupied West Bank, Israeli-annexed east Jerusalem, Lebanon, Jordan and Syria.
It also distributes aid and provides teacher training centers, health clinics and social services.
Many analysts, including Israelis, warn that closing the agency without having an effective replacement could lead to further poverty and perhaps violence.