US measures against PA likely attempt to force concessions in negotiations with Israel – Israel & Palestinian Territories Analysis

Executive Summary

In recent months, the Trump administration took several economic and diplomatic measures against the Palestinian Authority (PA), including cutting funding for the United Nations Relief and Works Agency for Palestine (UNRWA), as well as closing the Palestine Liberation Organization (PLO) mission in Washington, D.C.

These are likely driven by the Trump administration’s desire to act in accordance with perceived US national interests only, as well as to challenge the status quo, thus forcing the PA to return to negotiations and adopt more flexible positions vis-a-vis Israel.

While the measures have exacerbated heightened tensions between the US and the PA, as well as domestic tensions, in the near-term, they are unlikely to lead to broad hostilities between Israel and Gaza, or large scale unrest in the West Bank.

Nonetheless, the measures will likely contribute to an uptick in “lone-wolf” attacks by Palestinians targeting Israeli civilians and security personnel in the West Bank and Jerusalem, as well as fuel the ongoing civil unrest along the Israel-Gaza border.

Travel to Israel may continue at this time while adhering to security precautions regarding militant attacks, while avoiding the immediate vicinity of the Syrian, Lebanese, and Egyptian borders, due to the persistent risk for cross-border violence.

Current Situation

On August 31, the US State Department announced that the US Government will end all financial contributions to the United Nations Relief and Works Agency (UNRWA), which officially provides Palestinians with healthcare, education, and social services. The statement described the agency as an “irredeemably flawed operation”, further citing its unwillingness “to shoulder the very disproportionate share of the burden of UNRWA’s costs”.

The US regards UNRWA’s business model as “simply unsustainable” due to its “endlessly and exponentially expanding community of entitled beneficiaries”, namely the bestowing of refugee status to descendants of Palestinian refugees following the Arab-Israeli conflict of 1948-49.

The measure was denounced by the Palestinian Authority (PA) President Mahmoud Abbas whose spokesperson referred to the Trump administration’s move as “promoting terrorism” and a “flagrant assault against the Palestinian people and defiance of UN resolutions.”

Meanwhile, on September 10, the US State Department announced that it will close the Palestine Liberation Organization (PLO) mission in Washington, citing the PLO’s “refusal to engage with the US government with respect to peace efforts”.


The Trump administration’s decision to halt all funding to UNRWA comes amidst a series of policy changes vis-a-vis the Palestinians over the last year. On December 6, 2017, President Donald Trump officially recognized Jerusalem as the capital of Israel, followed by the relocating of the US Embassy from Tel Aviv to Jerusalem on May 14. In January, the Trump administration withheld 65 million USD of a planned 120 million USD contribution to UNRWA.

More recently, on August 24, the US State Department announced that it will cut a further 200 million USD in aid to the Palestinians, followed by the September 8 announcement of cuts amounting to 25 million USD earmarked for Palestinians in East Jerusalem hospitals.

The UN agency is funded almost exclusively by voluntary contributions from UN Member States. The cuts in the US’s contribution amount to approximately 300 million USD in planned funding for UNRWA. The US had previously contributed almost 30 percent of UNRWA’s 1.1 billion USD 2017 budget.

The PA has not engaged with a US-brokered diplomatic process since the latter’s recognition of Jerusalem as the capital of Israel in December 2017.

Assessments & Forecast: US measures in accordance with national interests, constitute effort to force Palestinian engagement

The Trump administration’s series of diplomatic and economic measures are likely motivated by two reasons. First, the decision is consistent with President Trump’s broader “America First” doctrine, which emphasizes a foreign policy that prioritizes perceived US national interests. This has manifested in the desire to demand that other governments increase their share of the budgetary burden for numerous international organizations. Thus, President Trump seeks to reduce UNRWA’s reliance on the US, as the latter had been paying almost 30 percent of UNRWA’s budget prior to the cuts and the Trump administration does not believe that UNRWA serves its national priorities.

Given the administration’s attempts to challenge previously held international consensus on issues such as the status of Jerusalem and Palestinian refugees, the UNRWA cuts are likely driven by the US’s goal of encouraging the Palestinians to return to the negotiating table and make concessions. By challenging the status quo, the US likely seeks to exert pressure on the PA to adopt more flexible positions on areas of policy that have long been considered non-negotiable by the Palestinian leadership. President Trump’s reported remarks on September 6 that the US “is not paying” (with reference to US aid to the Palestinians) if the Palestinians “don’t make a deal”, strengthens this assessment.

Furthermore, the US measures should be understood within the broader geopolitical context pertaining to the widely anticipated US-sponsored peace plan. Alongside the US’s attempts to force the Palestinians to make concessions, Egyptian authorities have sought to encourage both a Hamas-Fatah reconciliation process and, simultaneously, an Israel-Hamas long-term ceasefire, much to the chagrin of PA President Mahmoud Abbas, whose Fatah Party was reportedly excluded from the ceasefire talks. As the PA strives to return to control the Gaza Strip, such an exclusion may have been interrupted by Abbas as sign that he is considered irrelevant to the Gaza negotiations. Meanwhile, the US reportedly seeks to leverage a reported warming of ties between Israel and the Gulf countries, in addition to Egypt and Jordan, to promote its diplomatic plan and help to harness this growing relationship to exert pressure on the Palestinian leadership to yield to the US’s demands. Overall, the developments represent a weakening of the Abbas-led PA, which the US is likely seeking to take advantage of to promote their own interests.

However, the US measures are unlikely to succeed. Rather, they will likely exacerbate already heightened US-PA tensions. Given that the right of return of Palestinian refugees is considered by all Palestinian factions to be a prerequisite for the conclusion of the conflict, any international decisions pertaining to the refugee question are highly sensitive. In this context, the US’s decision to cease its funding of UNRWA, represents a perceived “flagrant assault against the Palestinian people” for the Palestinian leadership because it likely views such a decision as undermining the “right of return”. Therefore, the US’s efforts are prone to reduce the PA’s willingness to engage in a US-brokered diplomatic process.

If PA President Abbas was perceived as agreeing to US demands on the right of return and the status of Jerusalem, this would significantly undermine him in Palestinian public opinion due to the sensitivities surrounding these issues. Furthermore, it would present an opportunity for more extreme Palestinian factions, such as Hamas, to undermine the PA and sabotage any diplomatic process.
FORECAST: Given precedent, and the failure of previous measures to bring the Palestinians back to the negotiating table, the strategy is more likely to strengthen the Palestinian leadership’s refusal to engage and will therefore undermine the US-sponsored peace initiative due to this refusal.

Assessments & Forecast: Potential ramification on security environment due to economic initiatives

Overall, we do not assess that the US measures will lead to a broader violent uprising in the Palestinian Territories. On the contrary, the Israeli security apparatus continues to deter sophisticated acts of militancy exceptionally well, despite constant attempts to destabilize the security environment. For instance, in June, Israel Security Agency (Shin Bet) Director Nadav Argaman revealed that 250 acts of militancy, including suicide bombings, kidnappings and shootings, had been foiled by security forces in the first half of 2018. Furthermore, despite the lack of diplomatic engagement, the security collaboration between Israel and the PA remains stable and adds to the overall excellent security environment. Indeed, this cooperation is the only remaining Palestinian institution that the US continues to fund, in the form of the office of the United States Security Coordinator (USSC), which provides direct financial assistance and support to the PA Security Forces (PASF).
FORECAST: Taken as a whole, over the short-term, we do not anticipate that there will be an uptick in sophisticated, large-scale acts of militancy in the West Bank.

However, alongside the tangible, adverse economic effects of the cuts to UNRWA and additional aid, the broader series of economic and diplomatic measures is liable to exacerbate existing frustration and the Palestinians’ sense of marginalization. As a result, this perception may lead to an uptick in small-scale acts of militancy, motivated by these grievances. For instance, in the aftermath of the Trump administration’s recognition of Jerusalem, a slight temporary uptick in “lone-wolf” attacks was recorded, representing the increased sense of marginalization amongst the Palestinian populace. The question of the right of return of refugees is a similarly emotive and sensitive issue for Palestinians and any attempt to undermine this perceived right is liable to ignite Palestinian violence.
FORECAST: As a consequence, over the coming weeks and months, this anger could manifest in an increase in the volume of “lone-wolf” attacks such as throwing of Molotov cocktails, stabbings, shootings, and vehicle-ramming attacks on security forces and civilians, primarily in the West Bank and Jerusalem.

With respect to the Gaza Strip, UNRWA services, in part, play an important role in stabilizing the Palestinian security environment. UNRWA officially provides vital employment opportunities, medical services, and educational institutions. For instance, in Gaza, 240,000 students study at 252 UNRWA-run schools, illustrating the importance of such aid in helping to alleviate economic challenges.
FORECAST: With this in mind, the cuts to UNRWA are liable to exacerbate the precarious economic crisis. Given precedent, as Hamas tends to divert Gazans’ attention away from such economic crises and rather than permit criticism of its governance, this will likely redirect Gazans’ grievances towards Israel. Hamas’ resistance to Israeli policy, at present, typically manifests through the enabling, or instigating, of unruly riots on the Israel-Gaza border, encouraging the hurling of Molotov cocktails and incendiary balloons and kites into Israel, as well as infiltration attempts. In the short-term, these acts of unrest are likely to continue but are unlikely to cause a significant escalation. However, over the medium- and long-term, as the impact of the UNRWA cuts aggravates the economic crisis, there will be an elevated risk that Hamas will be forced to resort to armed conflict out of desperation, manifesting in rocket attacks, sophisticated infiltration attempts utilizing Hamas’ tunnel network, and mass riots on Israel’s borders. Nevertheless, overall, over the coming months, a significant change to the travel security environment that would have an impact on business continuity in Israel is unlikely.



Travel to Israel may continue at this time while adhering to security precautions regarding militant attacks, while avoiding the immediate vicinity of the Syrian, Lebanese, and Egyptian borders, due to the persistent risk for cross border violence.

Those traveling in the 40 km area surrounding the Gaza Strip should continue adhering to all safety precautions regarding early warning sirens for incoming rockets. In case you hear a siren, seek shelter in a protected area and remain inside for at least 10 minutes.

Palestinian Territories:

Business-essential travel to Ramallah can continue at this time, while maintaining heightened vigilance in Bethlehem. Adhere to basic security precautions regarding the threats of civil unrest and militancy. Consult with us for itinerary-based recommendations and ground support options.

Avoid nonessential travel to other Palestinian-controlled areas of the West Bank, including refugee camps, at this time given the persistent threat of civil unrest.

We advise against all travel to the Gaza Strip at this time due to continuous border crossing closures and the threat of militant activity.

If travel is essential, prior to entering Palestinian-controlled areas from Jerusalem-area checkpoints, confirm that crossings remain open and no unrest is taking place. Crossings near the cities of Jenin, Qalqilya, and Tul Karem remain less prone to violence.

Minimize night travel in major cities, as the majority of IDF and PA security operations occur at this time, particularly in the vicinities of Palestinian refugee camps.