US Considers Terrorism Sanctions Against UN Palestinian Aid Agency Amid Hamas Allegations

The Trump administration is considering imposing terrorism-related sanctions against the United Nations Relief and Works Agency (UNRWA), according to two sources with direct knowledge of the matter. Officials are reviewing allegations that the agency maintains ties to Hamas while weighing measures that could significantly impact its operations across the Middle East.

UNRWA provides critical humanitarian assistance to millions of Palestinians across Gaza, the West Bank, Lebanon, Jordan, and Syria. The agency’s services include aid distribution, education, healthcare, shelter, and social services. UN officials have repeatedly described UNRWA as the backbone of Gaza’s humanitarian response during the two-year conflict between Israel and Hamas.

The United States, once UNRWA’s largest financial supporter, froze funding in January 2024 following Israeli accusations that approximately a dozen staff members were involved in the October 7, 2023 Hamas attack that triggered the war. The allegations have further strained the already tenuous relationship between the agency and the Trump administration.

Secretary of State Marco Rubio took a particularly strong stance in October when he referred to UNRWA as “a subsidiary of Hamas” during discussions about humanitarian aid delivery to Gaza. “UNRWA’s not going to play any role in it,” Rubio stated, adding that while the administration was willing to work with other UN entities, UNRWA would be excluded.

According to Reuters, internal discussions are still ongoing about whether potential sanctions would target the entire agency or focus on specific officials and operations. One significant option under consideration is designating UNRWA as a “foreign terrorist organization” (FTO), a move that would effectively isolate the agency financially and severely restrict its ability to operate.

Such a decision would be extraordinary and without precedent, as the United States is both a member of the United Nations and hosts the international body that established UNRWA in 1949. The implications would extend far beyond Gaza, potentially disrupting refugee assistance throughout the region at a time when the agency is already facing severe funding shortfalls.

William Deere, who heads UNRWA’s Washington office, expressed concern about the potential sanctions, calling an FTO designation “unprecedented and unwarranted.” He emphasized that multiple independent investigations, including one by the U.S. National Intelligence Council, have concluded that UNRWA remains a neutral humanitarian actor essential to providing services in the region.

President Donald Trump reinforced his administration’s position in February through an executive order that reaffirmed the U.S. would not fund UNRWA. The order stated that “UNRWA has reportedly been infiltrated by members of groups long designated by the Secretary of State as foreign terrorist organizations, and UNRWA employees were involved in the October 7, 2023, Hamas attack on Israel.”

The U.S. position was further demonstrated in April 2025 when the International Court of Justice (ICJ) demanded Israel work with UNRWA. Washington backed Israel’s refusal, stating the country was under no obligation to collaborate with the agency and had “ample grounds to question UNRWA’s impartiality.”

In August 2024, UNRWA announced the conclusion of an internal investigation into Israeli claims that staff participated in the October 7 attacks. The probe, conducted by the Office of Internal Oversight Services, examined 19 employees and resulted in nine dismissals based on evidence that “could indicate” involvement. One case found no evidence of involvement, while in nine others, investigators determined that “the evidence obtained was insufficient” to prove participation.

The potential sanctions come amid a broader reassessment of international aid structures in the Palestinian territories, with significant implications for humanitarian assistance in a region already facing severe deprivation and instability. If implemented, these measures would mark one of the most dramatic steps yet in the Trump administration’s approach to the Israeli-Palestinian conflict and could reshape the humanitarian landscape across the Middle East for years to come.