The Trump administration is weighing whether to pursue terrorism-related sanctions against the United Nations Relief and Works Agency (UNRWA), as officials review allegations the agency has ties to Hamas and consider steps that could further pressure its leadership and operations, two sources with direct knowledge of the matter told Reuters.
The United Nations agency provides aid, schooling, healthcare, shelter and social services to millions of Palestinians in Gaza, the West Bank, Lebanon, Jordan and Syria. U.N. officials have described UNRWA as the backbone of Gaza’s aid effort during the two-year war between Israel and Hamas, but the Trump administration has accused the group of ties to Hamas – an allegation the agency vehemently disputes.
Washington, once UNRWA’s biggest donor, froze funding in January 2024 after Israel accused roughly a dozen staff members of involvement in the Oct. 7, 2023, Hamas attack that triggered the war.
In October, Secretary of State Marco Rubio referred to UNRWA as a subsidiary of Hamas.
“UNRWA’s not going to play any role in it,” Rubio said at the time when asked whether the agency would assist in delivering humanitarian aid to Gaza. “The United Nations is here. They’re on the ground. We’re willing to work with them if they can make it work, but not UNRWA. UNRWA became a subsidiary of Hamas.”
Reuters reported it was unclear whether recent internal discussions focused on sanctioning the entire agency or specific officials or operations, and that U.S. officials have not yet settled on what type of sanctions they might pursue.
The sources said the State Department has discussed declaring UNRWA a “foreign terrorist organization,” or FTO – a step that would financially isolate the agency.
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Any broad move against UNRWA could disrupt refugee aid across the region, as the agency is already facing a severe funding crisis. Such sanctions would be highly unusual, since the U.S. is both a U.N. member and the host nation of the body that created the agency in 1949.
William Deere, who heads UNRWA’s Washington office, said the group would be “disappointed” if officials were discussing an FTO designation, calling such a step “unprecedented and unwarranted.”
He pointed to multiple investigations – including one by the U.S. National Intelligence Council – that concluded UNRWA remains a neutral and essential humanitarian actor.
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The White House and State Department did not immediately respond to Fox News Digital’s request for comment. The U.S. and Israel have maintained tough positions towards the agency, particularly in the aftermath of the Oct. 7, 2023, massacre.
President Donald Trump in February reaffirmed that the U.S. would not fund UNRWA. In the executive order, Trump said 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.”
When the International Court of Justice (ICJ) in April 2025 demanded Israel work with UNRWA, Washington backed Israel, saying it was under no obligation to work with the agency and had “ample grounds to question UNRWA’s impartiality.”
UNRWA announced in August 2024 the end of an investigation by the Office of Internal Oversight Services into whether its staff participated in the attacks, as Israel claimed.
The probe examined 19 employees and resulted in nine dismissals over evidence that “could indicate” involvement. The investigation found one case with no evidence of involvement and nine others in which “the evidence obtained by OIOS was insufficient” to prove participation, the agency said.
Fox News Digital’s Rachel Wolf and Reuters contributed to this report.
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