US threatens UN funding freeze over Palestine membership bid and ICC action

The United States said on Thursday it would withhold 10 percent of its funding to the United Nations and its agencies if Palestine secures full UN membership or if the International Criminal Court (ICC) authorises investigations into Israeli officials.  

The move comes amid sustained international scrutiny of Israel’s genocidal war on Gaza, now in its third year. 

Under a nearly 500-page funding package for 2026, cited by The Jerusalem Post, Washington has made the release of 10 per cent of UN funding conditional on what it describes as "credible steps" by the organisation to address what was described as anti-Israel bias.  

If these steps are not taken, according to the report, the funds will remain frozen.  

The package also calls for Israel’s removal as a permanent agenda item from certain UN bodies. 

The legislation requires US Secretary of State Marco Rubio to submit a report by 30 September 2026 detailing resolutions considered by the UN Human Rights Council over the previous 12 months and the actions taken in response. 

The funding package further states that US assistance will be terminated for any party found to be diverting American funds to Palestinian Authority (PA) personnel in Gaza, members of Hamas, or the Palestinian Liberation Organisation (PLO). 

It also bars funding to the UN International Commission of Inquiry on the Occupied Palestinian Territory, including East Jerusalem, and Israel. 

In addition, US funding remains prohibited for programmes deemed to honour individuals classified by Washington as "terrorists", as well as for educational institutions in the West Bank or Gaza bearing such names.  

Any future US assistance to a Palestinian state would be contingent on a determination that it is committed to "peaceful coexistence with Israel" and is taking effective measures to counter "terrorism" and "terrorist financing".  Israel has frequently accused the PA of funding terrorism and has withheld millions of dollars in tax revenues for the Palestinian administration over this claim.

The document also sets administrative requirements for UN bodies, including proof of proper use of travel funds and the maintenance of a publicly accessible website. 

The announcement follows the US withdrawal from 66 international bodies last week, which was followed by Israel’s foreign ministry confirming on Tuesday that it was severing ties with several international organisations, including UN agencies, citing alleged bias and bureaucratic inefficiency. 

The foreign ministry said it would continue to review Israel’s engagement with other UN agencies. 

Israel has long accused the UN, without credible evidence, of institutional bias, particularly UNRWA, the UN agency for Palestinian refugees. Israel's military has frequently targeted aid workers, including UNRWA staff, in Gaza during its onslaught on the territory.

In a letter dated 8 January, UN Secretary-General Antonio Guterres warned Israeli Prime Minister Benjamin Netanyahu that Israel could face referral to the International Court of Justice if it failed to repeal legislation targeting UNRWA and return seized assets. 

“The United Nations cannot remain indifferent to actions taken by Israel which are in direct contravention of its obligations under international law,” Guterres wrote, calling for the measures to be reversed without delay.