The United Nations defended its appeal for countries to keep funding the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) after the United States argued that donors should stop supporting an agency it claims has been infiltrated by Hamas and instead direct its money toward the Security Council-backed Board of Peace. 

Speaking at UNRWA’s annual pledging conference in early July, U.S. Ambassador Jeff Bartos accused member states of repeating a failed approach and said the agency had become a “subsidiary of Hamas.”

“Doing the same thing over and over, expecting a different result is the definition of insanity,” Bartos said. “And yet, here we are again, another annual pledging conference for UNRWA. Same speeches … same condemnation of Israel, same failures to condemn Hamas.”

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Bartos urged governments to stop funding UNRWA schools in Gaza, which he accused of indoctrinating children in hatred of Jews and glorifying terrorism. He also cited allegations that UNRWA employees participated in the Hamas-led Oct. 7, 2023, attack against Israel.

“You can choose to fund incitement, terrorism and stagnation, or you can choose to fund the Board of Peace, giving Gazans a path to peace, prosperity and real, durable change,” Bartos said.

The Board of Peace is a U.S.-led body created under President Donald Trump’s Gaza plan to oversee transitional governance, reconstruction and long-term development alongside a Palestinian technocratic administration. The administration argues it offers a better alternative to UNRWA by shifting aid away from what it says is a Hamas-infiltrated system and toward accountable governance and economic recovery.

Asked by Fox News Digital why U.N. Secretary-General António Guterres was asking countries to put additional money into UNRWA rather than support the Board of Peace, U.N. spokesman Stéphane Dujarric defended the agency’s record and mandate.

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Dujarric said Wednesday that UNRWA officials, including former Commissioner-General Philippe Lazzarini and acting chief Christian Saunders, had taken “strong action” when presented with facts concerning possible infiltration by people aligned with terrorist organizations.

“UNRWA doesn’t operate through a sort of immaculate conception,” Dujarric said in a press briefing. “It is there because there is a mandate given to it by the General Assembly, and we continue to fulfill that mandate. It has a very important role to play on the humanitarian front.”

Dujarric added that the Security Council resolution supporting the Board of Peace also calls on the United Nations to deliver humanitarian assistance and lead humanitarian activities in Gaza.

“UNRWA is part of that system,” he said.

The U.S. position contrasted sharply with those of several European governments.

At the same pledging event, the United Kingdom announced £23 million in support for UNRWA. 

British Ambassador James Kariuki called the agency “indispensable” to providing essential services to Palestinian refugees across Gaza, the West Bank, Syria, Lebanon and Jordan.

France also reiterated what its representative described as “full support” for the agency, saying UNRWA continues to provide indispensable assistance despite growing obstacles. France said it had provided €123 million to UNRWA since 2023 and would announce its 2026 contribution soon.

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The French representative said allegations against UNRWA had been taken seriously and argued that the agency was implementing recommendations from the Colonna review intended to strengthen neutrality and transparency. France also supported an eventual, gradual transfer of UNRWA’s responsibilities to reform and strengthen Palestinian institutions as part of a broader political settlement.

The funding dispute comes as UN Watch is demanding that Guterres waive any immunity enjoyed by Lazzarini, whose term has ended, so national authorities can investigate allegations that he ignored repeated warnings about Hamas infiltration.

In a June 30 letter, the Geneva-based watchdog claimed that it had provided Lazzarini and his administration with evidence involving teachers, school principals, union leaders and other employees who allegedly supported or were affiliated with Hamas and other terrorist groups. It argued that the claims create grounds for an independent criminal investigation.

Hillel Neuer, executive director of UN Watch, told Fox News Digital that his organization told Lazzarini “that there are supporters of terrorism — in some cases, actual members of Hamas — working as teachers, working as school principals,” Neuer said, “Not one bad apple, not a few rotten apples, but the problem of support for terrorism … was systematic.”

Neuer said waiving Lazzarini’s immunity would not amount to a finding of guilt but would allow prosecutors to test the evidence.

“The investigation may prove there’s no evidence, and it’s over,” Neuer said. “But at least you should waive immunity to allow an investigation. The U.N. said that if anyone was found involved, ‘we will cooperate.’ Now is the test.”

Asked whether Guterres would consider waiving Lazzarini’s immunity, Dujarric did not answer directly.

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“As far as I know, UN Watch is not a judicial authority,” he said. “We have always, as a matter of principle, cooperated with investigations by national authorities.”

UN Watch’s letter argues that immunity exists to protect the interests of the United Nations rather than provide a personal benefit to an official, and that it should be waived where it would obstruct justice without harming the organization.

Fox News Digital contacted UNRWA for comment but did not receive a response.