American President Donald Trump is preparing to cut half of US donations to UN Relief and Works Agency for Palestinian Refugees (UNRWA).
Reports quoted American official saying that Trump is likely to send only $60m of a planned $125m first instalment to the UNRWA.
Future contributions would require the agency, which Israel and US want to be ended in order to end the issue of the Palestinian refugees, to demonstrate significant changes in operations, the officials said.
He added that one suggestion under consideration would require the Palestinians to re-enter peace talks with Israel.
The state department said on Sunday that “the decision is under review. There are still deliberations taking place.”
Plans to withhold some money is backed by secretary of state Rex Tillerson and defense secretary James Mattis, who offered it as a compromise to demands for more drastic measures by UN ambassador Nikki Haley, the officials said.
Haley wants a complete cutoff in US money until the Palestinians resume peace talks that have been frozen for years.