Palestinian officials have urged the United Nations Relief and Works Agency for Palestinian Refugees (UNRWA) to reverse its decision to dismiss hundreds of Gaza-based staff who were displaced to Egypt during Israel’s war on the besieged enclave.
The issue was discussed on Wednesday during a meeting of the Executive Committee of the Palestine Liberation Organisation in Ramallah, which focused on a decision by UNRWA Commissioner-General Philippe Lazzarini to terminate the contracts of around 560 employees.
Many of the affected staff had left Gaza either to receive medical treatment abroad or to escape Israel's attacks on the territory, UNRWA's largest area of operations.
In termination notices issued to employees, the agency said it had failed to secure sufficient funding to maintain its programmes in Gaza and meet salary obligations. It described the layoffs as a "difficult decision" forced by severe financial constraints.
UNRWA also said it would outsource its security department in Gaza and place 20 staff members on exceptional paid leave for three months. Several employees reported a 20 percent reduction in salaries alongside cuts to working hours.
The Palestinian Authority warned that the dismissals would further undermine the quality of services provided to Gaza’s population, around 1.9 million of whom remain displaced.
Worsening financial crisis
UNRWA has faced chronic funding shortfalls for years, but has warned that its financial position has sharply deteriorated since Israel’s war on Gaza began in October 2023.
Palestinian officials said on Wednesday that the agency’s projected budget deficit for 2026 has widened to $384 million, compared with a previously estimated regular budget of $959 million.
The financial strain has coincided with mounting labour unrest inside the agency. Staff unions have called for an open-ended, comprehensive strike involving all UNRWA employees and facilities starting on 8 February.
Officials in Ramallah said the funding gap was largely driven by decisions by international donors to cut their contributions by up to 50 percent.
Several countries suspended funding to UNRWA in 2024 following unsubstantiated Israeli allegations of agency links to Hamas. While many donors later resumed funding, contributions have largely remained below pre-war levels.
The United Kingdom and the United States, both historically among UNRWA’s largest donors, have yet to fully restore their regular funding.
UNRWA is widely regarded as the backbone of the humanitarian response for Palestinian refugees, providing education, primary healthcare and emergency assistance to millions of people across Gaza, the occupied West Bank, Jordan, Lebanon, and Syria.
The agency was established in 1949 under UN General Assembly Resolution 302, with a mandate to provide relief and employment to Palestinian refugees displaced by the creation of Israel.