Israelis voice warnings, Palestinians talk of blackmail after Trump threatens to cut funding

JERUSALEM – The Trump administration's threat to cut aid to the Palestinians to force them into a peace deal may have dire humanitarian consequences that could backfire on Israel, Israeli security officials and analysts warned Wednesday, while Palestinians slammed it as blackmail.

The U.S. pays "the Palestinians HUNDRED OF MILLIONS OF DOLLARS a year and get no appreciation or respect," Trump tweeted Tuesday evening. "With the Palestinians no longer willing to talk peace, why should we make these massive future payments to them."

Earlier in the day Trump's envoy to the United Nations, Nikki Haley, suggested the United States will cut funding to the United Nations Relief and Works Agency, the agency tasked with assisting Palestinian refugees, until the Palestinian leadership returns to the negotiating table. The United States is UNWRA's biggest donor and gave it more than $360 million last year, 40 percent of the organization's budget.

Palestinian officials reacted furiously to what they interpreted as an attempt by the United States to give up their claims to Jerusalem in return for continued financial aid.

"Palestinian rights are not for sale," said Palestinian official Hanan Ashrawi, a member of the Palestine Liberation Organization's executive committee. "By recognizing Occupied Jerusalem as Israel's capital, Donald Trump has not only violated international law, but he has also single-handedly destroyed the very foundations of peace and condoned Israel's illegal annexation of the city. We will not be blackmailed."

Palestinian President Mahmoud Abbas last month said the United States had disqualified itself from a role brokering a peace process by recognizing Jerusalem as the capital of Israel and saying he would move the U.S. Embassy there. The move was taken by Palestinian officials as a clear indication of U.S. bias toward Israel and a rejection of Palestinian claims to the city, even though Trump said at the time that it should not be read as a position on the city's final status.

"Cutting funding would not bring anything good to the situation," said an Israeli security official speaking on condition of anonymity due to the sensitivity of the topic. "Doing this would end up making the Palestinian leadership even weaker, then there really would be no one to talk to or rely upon."

Abbas' Palestinian Authority coordinates with Israel on security, but the already weak leader has been further undermined by Trump's Jerusalem decision, with nothing to show for decades of negotiations.

UNWRA runs schools and educational programs that Israeli defense officials see as important counterbalance to Hamas, which has controlled Gaza for the past decade, while the organization also provides essential primary health care and other services for Palestinians.

"Traditionally the Israeli defense establishment has resisted pressure by Israeli hawks who want to shut down UNWRA funding," said Ofer Zalzberg, a senior analyst at the International Crisis Group. "They say, if it's not UNWRA, then education will be provided by Hamas."

Chris Gunness, UNRWA's spokesperson, said the agency had not been notified of any changes in U.S. funding. The organization's work "is described as indispensable to the dignity of Palestine refugees and the stability of the region," he said.

UNWRA runs 700 schools for Palestinians across the region, nearly 150 primary health clinics and employs over 30,000 teaching staff, doctors, nurses, social workers, sanitation laborers and engineers.

"We still very much want to have a peace process. Nothing changes with that. The Palestinians now have to show they want to come to the table," Haley said Tuesday in the U.N. Security Council. "As of now, they're not coming to the table, but they ask for aid. We're not giving the aid. We're going to make sure that they come to the table."

However, Trump's tweet, which also made reference to his Jerusalem decision, may have the opposite effect and only cause a stronger backlash, Zalzberg said. "It's being perceived as deeply offensive," he said. "It's been taken to say 'we will pay you to make a concession on Jerusalem."

Palestinian officials say they are willing to return to negotiations but won't be coerced.

"Jerusalem and its holy sites are not for sale, not with gold, nor with silver," Nabil Abu Rudeineh, a spokesman for Abbas, said in a statement. He said the Palestinian leadership is not opposed to returning to negotiations, but they need to have Arab and international legitimacy with negotiations based on a two-state solution with east Jerusalem as Palestine's capital.

Tayseer Nasrallah, a member of the Fatah Revolutionary Council in Nablus described the threat as "complete madness and blackmail by the United States to exert pressure on us to give up our national rights."

The U.S. decision to recognize Jerusalem prompted weeks of protests in Arab and Muslim countries around the world and numerous 'days of rage' in Jerusalem, Israel and the West Bank. At least 12 Palestinians have been killed in clashes with Israeli security forces, including two militants in an Israeli airstrike that came as response to rockets fired from Gaza at civilian areas in southern Israel.

Since the announcement, rocket fire from the Gaza Strip has reached levels not seen since the 2014 war between Israel and Hamas. The Israeli military said two rockets were fired at Israeli territory on Wednesday.

Israeli security officials and analysts have been saying for months that the Gaza Strip is on the brink of a humanitarian crisis.

"Cutting aid to the Palestinians at this stage would have the opposite effect to what the Americans want," said Moshe Maoz, an Israeli professor of Islamic and Middle Eastern studies at the Hebrew University of Jerusalem. "This is brutal pressure from the U.S., not only ignore the Palestinian's rights to East Jerusalem but also cutting aid? I don't have any good word for this stupid policy.

"The situation in Gaza is terrible, if America cuts its aid, it would be catastrophic," he said.

In an article published last November on the website of the Institute for National Security Studies, Maj. Gen. Yoav Mordechai, head of COGAT, the Israeli military authority responsible for implementing government policy in the West Bank, described the link between the social and economic conditions in Gaza and the security situation.

He urged the international community to give more funding to Gaza to improve the economy.

Recognition of Gaza's humanitarian crisis was also brought to the attention of the Israeli government in September when Nadav Argaman, current head of Israel's Internal Security Agency, highlighted that Hamas was already struggling to address the difficulties facing its population.

"The economic-civilian difficulties in the strip are getting worse," Argaman said, according to a report in the Israeli daily Haaretz. "Rehabilitation of the strip is faltering. There is a serious crisis when it comes to infrastructure. Unemployment is increasing. There is a crisis over [the payment of] salaries and a drop in the gross [domestic] product."

However, Trump's tweet was welcomed by some right-wing Israelis. Education Minister Naftali Bennett, leader of the ultranationalist Jewish Home Party, commended Trump for not being afraid "to speak the truth, even if it is not popular."

"The truth is Jerusalem has always been, and will always be, Israel's capital," said Bennett in a statement. "The truth is no peace deal could ever be predicated on the division of Jerusalem."

He added: "The truth is the US has no interest in funding those who act against its interest. The truth is the Palestinian leadership continues to fund terrorists, using US tax moneys."

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The Washington Post's Sufian Taha contributed from Jerusalem.