The United Nations Relief and Work Agency for the Palestinian Refugees (UNRWA) was established in 1948 as a temporary relief agency. In spite of its failure to solve the refugee problem, it has been renewed and expanded for 60 years, with support from the entire United Nations community, including the United States and Israel. UNRWA's annual budget now exceeds half a billion dollars, and it has come to be treated as a permanent protector and advocate of what are depicted as millions of Palestinian "refugees" who, UNRWA claims. lack a homeland, citizenship, and governments to serve their needs. Its mandate has been renewed repeatedly by the UN General Assembly albeit with restrained criticism demanding more transparency and additional budget controls.
The purpose of this paper is to explore three questions: (1) Are most of the Palestinians in the Middle East in fact "refugees", and does treating them as "refugees" contribute to solutions or prevent them? (2) Is UNRWA the agency best suited to address the issues facing these populations most effectively, or does it create more problems than it solves? (3) If UNRWA is a problem, is it the least bad of the alternatives, or are there, in the balance of costs and benefits, other solutions with a better probability to bring the issue to a just and rightful resolution?
The paper concludes that UNRWA is not merely an "imperfect" agency, but one that is profoundly inimical both to the higher interests of its own Palestinian clients, and to the search for a political settlement of the conflicts in the region. It describes alternative solutions that could more effectively deliver services to these Palestinian populations while strengthening rather than undermining moderate elements and governments in the various host countries, including the Palestinian Authority. Strengthening the PA would help to advance the peace process. The paper proposes more effective ways to channel the enormous sums misappropriated to UNRWA, to achieve vital objectives of the donors that perpetuation of UNRWA will continue to subvert.
Sixty years ago UNRWA was created as a temporary emergency relief agency. Its main duties were constructing temporary shelters and providing essential food to the Palestinian families that left their homes during the 1948 Israeli-Arab war. Sixty years and billions of dollars later, UNRWA has become an entrenched permanent, overstaffed, affluent bureaucracy. Hardly any traces of the original mandate can be found in its current operations. In a surprising and unprecedented move for any emergency aid organization, UNRWA launched in September 2008 a two-year global celebration entitled: "UNRWA at 60". The celebrations are taking place at the UN headquarters (NY), Vienna, Geneva, Brussels, the Gulf States, and in the donor countries, among others. In the 60th celebration announcements UNRWA expresses the hope that its operations will grow and flourish for many more years to come. The lavish events put an additional financial burden on the donors that astonishingly did not stop to ask: is UNRW's 60th anniversary a cause for celebration, or is it a testimony of failure? We will show that "UNRWA at 60" is indeed a testimony of failure.
While the United Nations Relief and Work Agency for the Palestinian Refugees (UNRWA) was established in 1948 as a temporary relief agency, it has for 60 years enjoyed broad support from the entire United Nations community, including even Israel and the United States. UNRWA is treated as the protector and advocate of what are known as millions of Palestinian refugees who claim that for four generations they have lacked a homeland, citizenship, and a government to serve their needs. UNRWA's mandate has been renewed repeatedly by the UN General Assembly albeit with restrained criticism demanding more transparency and additional budget controls. The purpose of this paper is to explore three questions: (1) Are most of the Palestinians in the Middle East in fact "refugees", and does treating them as "refugees" contribute to solutions or prevent them? (2) Is UNRWA, on balance, the agency that is the most able to address the issues facing these populations most effectively, or does it create more problems than it solves? (3) If UNRWA is a problem, is it the least bad of the alternatives, or are there, on the balance of costs and benefits, other solutions with a better probability to bring the issue to a just and rightful resolution?
UNRWA claims that about five million Palestinians are refugees. We will show that most are not. Most Palestinians living in the West Bank, Gaza and Jordan have been integrated in the local communities, and many in Jordan have acquired Jordanian citizenship. In the West Bank and Gaza the residents carry PA official documents. Others have immigrated to the US and Europe where they are either legal residents or citizens. For most Palestinians, the transition from refugee camps to urban dwellings occurred decades ago. As early as 1950, the majority of the original 1948 refugees and their families began to move out of the camps and resettle in neighboring states and regions. Simultaneously, non-refugees began to move into the camps for economic advantages, especially to receive UNRWA's free services. UNRWA's bureaucracy soon adapted to the situation and moved away from its original relief mandate to providing non emergency, civil services.  Yet UNRWA has been perpetuating the myth of "millions of 1948 Palestinian refugees"; a myth that provides the raison d'etre for UNRWA's oversized bureaucracy. Moreover, UNRWA has succumbed to major bureaucratic pathologies. It has become an ineffective self-serving, work-creating agency suffused with favoritism and patronage. UNRWA is definitely not a typical international humanitarian aid organization. The UN agency is the largest non government employer in the region, employing over 29,000 Palestinians with a superstructure of 120 international advisors. Because UNRWA's international staff is very small, the operations are planned, executed and controlled by tens of thousands of Palestinian employees. Consequently, UNRWA's operations follow its own institutional imperatives rather than its international mandate. 
In the particular case of the West Bank and Gaza, UNRWA has created unique political and administrative dilemmas. UNRWA has become a non-territorial administration, taking on national-governmental responsibilities, though the Palestinian Authority rather than UNRWA has the legal jurisdiction over the territory and inhabitants. Operating as a "non-territorial, Palestinian government" UNRWA provides non-emergency, civil services (education, health, welfare, microfinance, etc) to an assorted population regardless of their refugee status. Ironically, the PA, that is the legal governing authority in the West Bank and Gaza, is forced to compete with UNRWA in providing civil services to its own citizens. Regrettably, the PA is no match for the bureaucratic network and expertise UNRWA has accumulated during 60 years of operation. Thus, as a result of UNRWA's operation the PA's credibility, legitimacy, and ability to gain the respect of its citizens are greatly diminished, causing the weakening of the PA's authority and most likely playing a role in the rise of Hamas.
The existence of UNRWA after the 1993 creation of the Palestinian Authority creates an anomaly. While the residents of the West Bank and Gaza are citizens of the PA and have enjoyed full political rights, including suffrage (as have most Palestinians of Jordan), they are at the same time international wardens of a UN governing authority that provides them with non-emergency civil services. UNRWA has created a de facto "state within a state" albeit with ambiguous legal status. Normally, no government would accept the presence, beyond its control, of an autonomous international organization that provides substitute services to its citizens. However, the PA lacks effective authority over either the "refugee camps" or UNRWA's operation in these areas. This is an abnormal situation.
Are UNRWA's Clients "Refugees"?
Defining the populations to whom services are administered by UNRWA as "refugees" is in most cases both misleading and harmful to the search for a solution. UNRWA's refugee registration process was profoundly flawed from its inception, and the original mistakes have been compounded over the succeeding decades. In the beginning, to gain the status of a "protected refugee" and qualify for an UNRWA refugee ID card entitling the holder to benefits, applicants must have been resident in Palestine between June 1946 and May 1948 and to have lost both their homes and their livelihoods as a result of the 1948 Arab-Israeli war. UNRWA itself reports that its original registration figures are based on information voluntarily supplied by applicants primarily for the purpose of obtaining access to Agency's services and hence can't be considered statistically reliable "demographic data." A simple declaration by the applicant was accepted as sufficient. UNRWA later granted benefits eligibility to the descendants of these self-declared 1948 refugees. As a result of these financial incentives, the number of putative "refugees" swelled from an estimated 914,000 in 1950 to over 5 million in 2009. UNRWA itself admits that the agency's "registration records do not necessarily reflect the actual refugee population owing to the factors such as: unreported deaths; false registration; and undetected absence from area of UNRWA operation". Thus, for six decades, UNRWA's vast budget is based on enormously inflated numbers of clients that have never been refugees. It is important to acknowledge the fact that for decades, UNRWA has been evading the donors numerous requests to replace the 60-year old refugee ID cards with a new picture ID cards. Such a process would have required UNRWA to execute a census, a process that UNRWA never conducted. The census and the demand for the refugees to come to UNRWA's offices, be photographed and get a bone fide UNRWA ID card would have resulted in a big embarrassment for the agency. Most probably the majority of the "registered refugees" will turn up to be none existent or settled.
A review of UNRWA's history reveals the unacceptable fact that for decades, UNRWA has thwarted all efforts to settle the issue and terminate its operations. UNRWA was created to provide short-term, emergency, humanitarian aid to Palestinian refugees, just as the newly formed United Nations sought to assist millions of refugee populations in other parts of the world created by the upheavals of World War II and its aftermath. The UNRWA operation was expected to be completed within two or three years, once the emergency conditions were resolved and the refugees resettled. The Palestinian refugees were at the time but a small percentage of the tens of millions of refugees worldwide receiving various forms of United Nations assistance. Dag Hammeskjold, the second UN Secretary General (1953-1961), initiated a plan for the reintegration of the Palestinian refugees in their host countries. Under his leadership, the UN General Assembly specifically instructed UNRWA to work to reintegrate the refugees in the places of their refuge. At the time, the refugee camps in the West Bank were under Jordanian authority and the refugee camps in Gaza were under Egyptian authority. The premise was that these two states would absorb the refugees through a process of reintegration financed by the international community. With the exception of Jordan, the Arab host countries' rejected the resettlement and reintegration proposals, and UNRWA instead, became a permanent, self-perpetuating bureaucracy.
By the early 1950s, UNRWA's original 1948 emergency humanitarian mission was completed. However, due to the agency's autonomous status, UNRWA was able to shift its operational agenda and began providing non-emergency, regular, daily social benefits to anyone registered with the Agency who it decided to give assistance, whether refugee or not. UNRWA and other reliable sources data show that the majority of the descendents of the original 1948 families ceased to be in need of relief assistance many decades ago. A 1987 General Assembly report found that, only 10% of UNRWA budget was dedicated to emergency relief, while the bulk was devoted "to educating children and furnishing advanced training, maintaining effective public healthcare services and providing basic welfare services to a largely industrious and self supporting [so-called] refugee population."  Already 30 years ago, it was reported that 95 percent of registered Palestinian refugees were self-supporting. A 2003 GAO report found that less than a third of the registered "refugees" live in designated so-called "refugee camps," some only because they prefer to build their homes in territory exempt from local taxes. Two thirds are integrated in the cities and states in the Middle East and beyond. Over two million are resettled in Jordan, most of whom are Jordanian citizens paying taxes and eligible to receive social services from the Jordanian government. All the same, these millions of people are, inappropriately, holders of UNRWA refugee cards and enjoy all of UNRWA's giveaway programs.
Once we realize that UNRWA is not actually in the refugee business at all, but is a social welfare agency distributing benefits to a body of preferred clients whether they qualify as needy or not, the real issue becomes clear: If the world community wants to provide economic and development assistance to Palestinians, is UNRWA the best way to select the Palestinian beneficiaries and the best agency to channel the assistance? A systematic review of UNRWA and other existing government and non-government organizations shows that it is not.
Alternatives for Better Education Opportunities
Education is UNRWA's single largest area of activity, accounting for half its budget and two-thirds of its staff. UNRWA provides education to over 500,000 students in 684 schools, and this is often cited as one of its supreme achievements. Commissioner General Ms. Abu-Zayd stated recently: "Education has been central to UNRWA's human development agenda throughout its sixty-year history. Today, more than half of our budget is devoted to the primary education of refugee children, with equal opportunity given to boys and girls". However, UNRWA's extensive and costly educational activity is neither humanitarian nor consistent with UNRWA's mandate. The students of UNRWA's schools come from a largely undistinguished and unidentified population, who could hardly be considered "refugees". Moreover, recent scholastic achievement reports show that the same students could be better served by educating them through the hosts' national school systems. If the international community wishes to assist Palestinian children by subsidies to their education, this could be accomplished more effectively and with fewer collateral problems by providing the same assistance to the state educational systems where they reside rather than through an over-sized international bureaucracy that perpetuates the political myth that the Palestinians are refugees and should be allowed to return to their former homes.
As mentioned earlier, UNRWA's claim to fame in education proves misleading. Its schools are not scholastically superior, in fact they are often inferior, to the local-national schools, and Jordan is a case in point. James Lindsay's thorough report shows that while UNRWA's services are free, students still prefer the national school systems. "UNRWA schools are losing students to Jordanian government schools (most Palestinian refugees in Jordan are citizens so they are able to choose which schools their children attend)." The loss of students is in contradiction to the rise in refugee rolls. "The number of registered refugees in Jordan increased by 32.4% from December 1997 to December 2007, while the number of students in UNRWA schools declined by 13%". To avoid negative ramification of its deteriorating educational reputation UNRWA decided to launch an elaborate public relations campaign. It is hard to believe that these tactic will dispel the criticism.
As we have shown, the answer to UNRWA's educational problems is clear: turn over UNRWA's costly and inferior educational system to the local governments. While the transfer will require a major structural change the process will be facilitated by the fact that the majority of the students are bone fide citizens of Middle Eastern states, all the teachers are local Palestinians, and the curriculum is adopted from the host countries and the PA texts. The transfer of the educational operation is necessary and timely. Money will be saved and overstuffed, inefficient bureaucracy will be terminated. The big winner will, of course, be the students!
Palestinian Self-Reliance Requires an End to UNRWA's Operations
During its six decades of operation, UNRWA has deepened and propagated the Palestinian dependence on its services. This has been detrimental to the development of Palestinian economic and social self-reliance. It probably helped the rise of Hamas which presents itself as a genuine, self-supporting economic and social Palestinian institution. We argue that UNRWA's inflated bureaucracy and the unrestrained scope of its non-emergency services hinder rather than induce Palestinian self-reliance. UNRWA's operations have been particularly damaging to the fledgling PA that has to accept the existence of a competing United Nations governing authority within its boundaries . The World Bank recently reported that the PA is "developing strategies that encourage productivity and growth in the industrial, agricultural, housing, and tourism sectors and allow the Palestinian economy to develop a diversified export portfolio" UNRWA's operations have the reverse effect of nurturing and advancing dependence. We will present feasible alternatives to UNRWA's operations that have been developed by Palestinian scholars who see that UNRWA undermines their road to self-reliance
While UNRWA has no legal governing authority, it issues building permits, authorizes commercial activities and acts as a "private banking system" distributing millions in cash and loans to those it favors. Not surprisingly, thousands of residents of the West Bank and Gaza, and millions in Jordan know only one governing authority: UNRWA. In its "UNRWA at 60" document the agency reports that in FY 2009, it has outstanding 169 million USD in loans, granted to 157,000 people! "The agency has been providing loans worth USD 30 million each year". UNRWA boasts that "it is the largest micro-finance service provider in the occupied Palestinian territories and the second largest micro-finance institution in Syria".  UNRWA does not include details concerning this unusual financial activity in its annual reports, and we wonder: how can a skeleton body of 120 international advisors properly control and manage this high volume financial activity? One must also ask the donors: if the international community wishes to distribute millions of dollars (cash loans and grants) to Palestinian people, shouldn't it be done in the proper manner, through national banking institutions that exercise control, accountability and transparency mechanisms, and not through the shady bureaucracy of UNRWA? .
Ending this detrimental anomaly requires the termination of UNRWA's non-emergency operations and the transfer to the proper local authorities the responsibility and authority to plan and execute public policy, namely, educating the Palestinian children and running health clinics. The termination of UNRWA's status as a "non-territorial government" in the West Bank and Gaza will establish the PA as the only legal, governing authority. The PA leadership will gain the respect and trust of the people that is needed to counter Hamas influence in Gaza. Indeed, in the West Bank, where UNRWA's presence is weaker, the PA's position and authority is secure and growing. The trade off is clear: a strong and "fat" UNRWA means a "lean" and weak PA. In Gaza, Hamas leadership grew stronger under the protection of UNRWA, and undermined the PA efforts to gain control of Gaza. Many Palestinians openly criticize this role of UNRWA and express the hope that "UNRWA is not forever."
The following are a few working plans suggested by Palestinian scholars that show a Palestinian desire and appeal for self reliance. "One possible way of easing the transition (from UNRWA to the PA and other host governments) would be to create a flexible transitional funding mechanism, which would allow donors to transfer resources for a variety of purposes with some assurance of accountability and transparency. Such a facility would work as a flexible multi-country, multi-purpose mechanism for channeling donor assistance." The possibility of UNRWA being in charge of a transitional fund was not accepted because "donors would be concerned whether the Agency could maintain the appropriate degree of objectivity if it were asked to manage the financial aspects of the transfer of services." Another alternative suggested that "UNRWA might be gradually wound down over 2-5 year period. During this period, its previous functions would be gradually assumed by host governments. UNRWA might also take on new tasks, whether to assist host governments in upgrading the quality of their own service delivery, or in assisting the implementation of various aspects of a permanent status agreement. Or, UNRWA would face an indeterminate transition period between initial agreement on a framework for resolving the refugee issue and agreement on specific modalities. This would then be followed by a subsequent wind down period of 2-5 years."
Another alternative suggested: "A first step would need to be reaching of agreement among key donor countries that the time had arrived for UNRWA and the PA, and where possible, UNRWA and the host governments, to enter into firm arrangements for the transfer, over a specific period, of UNRWA's functions to the PA and to those regional government…Establishment of a cooperation agreement between UNRWA and the PA, and the PA encompassing secondment of staff from the PA to UNRWA schools and clinics, with the PA to be given additional financial assistance from the donors for the purpose (to cover salary and allowance differentials). Increase outsourcing to the PA of refugee education and health services. Refugee children should be able to go to school wherever there is capacity in PA schools to absorb them – as currently happens to some extent in the West Bank."  "While the government of Syria could absorb current UNRWA expenditures in Syria relatively easily, the task is more difficult in Lebanon…Jordan faces substantially greater relative costs than do either Syria or Lebanon. Additional resources should be given to the PA since in the Palestinian territories; there is no prospect that the Palestinian budget could suddenly absorb the costs of providing under UNRWA health, education and other social services in the immediate future."
In summary, UNRWA's clients, the Palestinian people, are highly critical of the "patron" that was imposed upon them. We agree with them that the termination of UNRWA's operations is not only feasible but is imperative. Donors to UNRWA actually harm the Palestinian community by perpetuating UNRWA's superfluous existence.
UNRWA is Neither an Exclusive Nor the Best Aid Provider
For sixty years, more than thirty international organizations, hundreds of NGOs, and all members of the OECD have been transferring billions of dollars and in kind aid to the Palestinian community. However, hardly any cost and benefit analysis is carried out to compare the value and consequences of the generous, annual contributions to UNRWA with the efficacy of aid given through other institutions. Notwithstanding the lack of evidence that UNRWA's operation serves the cause of the Palestinian community, in March 2009, at an international donor's conference in Sharm el-Sheikh, Egypt, Secretary of State Hillary Clinton announced the administration's pledge of $900 million aid package that includes hundreds of million to UNRWA. 
UNRWA is only one of many aid providers and indeed, the Palestinian environment resembles an "aid bazaar" with international organizations and donor states competing with each other over "who is the biggest aid provider". Donors come from all creeds, faith, agenda, ideology, size, affiliation and intentions. The Big Four are the USAID, the European Commission, the World Bank, and the United Nations Development Program. Others include FAFO (The Norwegian Peace Building Center), the Finnish government, the British Council, the Italian and Japanese governments, and many international NGO, including Catholic relief, Care, Save the Children, OXFEM, UNICEF, to name a few. All the aid providers work simultaneously, at the same locations, and provide aid to the same population. In this diffused system, UNRWA is seeking to preserve its dominance position even after its original task has long been achieved.
We argue that UNRWA's operations are redundant and irrelevant vis-à-vis the vast assistance campaigns executed by the international community. The US in particular needs to stop transferring vast amounts of resources to UNRWA while the USAID is simultaneously carrying out independent development projects to the same population. . "Most aid to the Palestinians is provided by USAID to U.S.-based NGOs operating in the West Bank and Gaza. Funds are allocated for humanitarian assistance, economic development, democratic reform, improving water access and other infrastructure, health care, education, and vocational training." If the USAID autonomously carries out all these development projects why provide UNRWA's inefficient organization with billions of dollars for the same activities? Indeed, between 2002 and 2009 the US increased its contributions to the Palestinians by more than 200%-- from $ 72 million in 2002 to $ 150 million in 2006 and to $ 414 million in 2008!
The picture repeats itself with aid provided by the European Commission. In 2008 the EC announced a contribution of $ 461 million Euros to be spent on humanitarian, food, and non humanitarian projects. The World Bank is carrying out independently, a variety of community development projects in the west Bank and Gaza, supporting a pioneering new community driven development project, the Village and Neighborhood Development Project" (VNDP). The UNDP (United Nations Development Program) is also heavily involved in Palestinian community and economic development projects. UNDP autonomous operations include: democratic governance, crisis prevention and recovery, environment, poverty reduction, gender and HIV/AIDS. UNDP reports that its 2008 budget for economic aid for Gaza was only $ 80 million, but this lean yet efficient project has already generated over 50,000 jobs for Palestinian workers. In addition since 2005, the Finish government has also been assisting the education sector in the West Bank and Gaza.
Clearly, UNRWA's expensive existence is not indispensable! Terminating UNRWA's ineffective operations and shutting down its oversized bureaucracy will not result in lack of assistance for the Palestinian people.
UNRWA Inhibits the Peace Process
For decades UNRWA has used scare tactics to claim that its existence is essential to the peace process. The scare tactics seem to work because UNRWA's budget has grown exponentially. UNRWA strongest argument is that the Palestinian "refugees" need a patron to take care of them until a legitimate Palestinian government is established and takes over UNRWA's operations. In early 1995, when the donors proposed to begin a gradual transfer of UNRWA's operations to the newly created PA and the other host governments, UNRWA raised strong objections to the plan insisting that it should continue operating "for practical as well as political reasons" We argue that nothing is further from the truth.
UNRWA's original mandate was neither clear nor specific on the question of "assist[ing] the refugees until their status was politically resolved". Our discussion clearly shows that the status of West Bank and Gaza Palestinians has been resolved, and UNRWA's services are redundant and superfluous. Jordan and Syria are two recognized, functioning states that could and should take over UNRWA's operations and provide all the necessary services equally, to all the Palestinians who have resided for four generations amidst them. The only place where emergency aid may be needed is Lebanon. Here too, the international community is actively and intensely involved in providing aid to the camps. UNRWA is only one of many well funded non governmental and governmental aid organizations that provide assistance to the camp residents (mostly non refugees)in Lebanon. In the case of Gaza and the West Bank, UNRWA functions as a "non territorial government" competing with the PA as it provides civil services to PA citizens. Since 1995, the PA has been the legitimate Palestinian governing authority. It should run schools, operate health clinics, issue building permits, and collect taxes. UNRWA's existence denies the aspiring Palestinian people the right to self-government and self-reliance. The rise of Hamas may be linked partly to the PA's weakend authority
As we have shown, a major component in UNRWA's survival strategy is the nurturing of a mutual dependence syndrome, so that the Palestinian community thinks it cannot function without UNRWA's inflated bureaucracy. UNRWA needs the myth of "five million refugees" and in exchange, provides the Palestinians free services. The truth is that UNRWA's tactics actually hinder the peace process and any realistic resolution of the refugee issue. UNRWA's baseless and inflated registration numbers feed the impossible demand for a "right of return".
Thus, it is not surprising that UNRWA has consistently resisted any effort by Israeli governments to resettle the "refugees". Immediately after the administration of the West Bank and Gaza shifted from Egypt and Jordan to Israel as a result of the war of 1967, the Israeli Military Administration initiated a major camps reconstruction policy. The plan involved moving the refugees to permanent housing, as well as widening camps roads and improving Gaza infrastructure and living conditions, and demolition of temporary shelters. In a complete violation of UNRWA's mandate, these positive measures were vigorously protested by UNRWA, including protests before the UN General Assembly, calling upon Israel to abandon its plans and refrain from any action that might lead to resettlement of Palestinian refugees. Later, during the 1990s, UNRWA rejected plans initiated by local Palestinian municipal authorities to annex the residents of UNRWA's areas of control to the Palestinian areas of responsibility. Even the request to strengthen the ties between UNRWA's clients and the local Palestinian municipal authorities was rejected.
In 2000, Palestinian leaders publicly expressed disappointment at UNRWA's resistance to relinquish its responsibilities. "While the Oslo Process of 1993 renewed the debate about the future of UNRWA, and for the first time since UNRWA was established it is possible to see on the horizon the end of the Agency's mission and UNRWA's ultimate dissolution…five years later, however, the future of the Agency remains unclear." To date, UNRWA continues to deny the well known fact: most refugees are long settled. Only an acknowledgment of this fact will move the peace process forward.
UNRWA Violates Antiterrorist Laws and Conventions
UNRWA is a United Nations agency, and is expected to adhere to antiterrorism laws and Security Council resolution. But UNRWA facilities, including schools, health clinics and even hospitals, are used as training grounds and safe haven for guerrilla armies and terrorists. The autonomous status of UNRWA has enabled the agency to ignore these conventions with impunity. UNRWA, by its own admission, contravenes US law. UNRWA's former Commissioner-General Peter Hansen admitted in 2004 that he was sure that there are Hamas members on UNRWA's payroll and he did not see that as a crime. The donors, in particular the largest donor, the US, also ignore UNRWA's disregard for international anti-terrorism laws. The US Congress has been continuously approving generous contributions to UNRWA in spite of UNRWA's violation of US laws. Section 301 of the 1961 Foreign Assistance Act (PL 87-195) as later amended by Congress to says: "No contributions by the United States shall be made to UNRWA except on the condition that UNRWA takes all the possible measures to assure that no part of the United States contribution shall be used to furnish assistance to any refugee who is receiving military training as a member of the so called PLO or any other guerrilla type organization or who has engaged in any act of terrorism." While the USAID is taking major steps to ensure that US resources, including its aid to the West Bank and Gaza, do not go to Hamas and Hezbollah members, UNRWA does not.
Matthew Levitt of the Washington Institute argues that "UNRWA does not have ready access to information on refugees who are receiving military training from guerrillas. As recently as December 2002, USAID 'cleared' several charity commitments to receive funding despite information publicly tying them to Hamas." As early as 2003, a GAO inquiry determined that UNRWA is in violation of US law. "UNRWA's implementation of procedures to address section 301(c) is constrained by several factors. First, it relies on host governments to review local jobs applicants. Also it can't determine if its beneficiaries meet section 301( c) criteria owing to concerns for its staff's safety and its inability to verify beneficiary responses."
Another recent inquiry reached even harsher conclusions. "UNRWA makes no attempt to weed out individuals who support extremist positions… and some staff members undoubtedly support violence to achieve these goals ". UNRWA is using disturbing tactics to permit keeping Hamas and Hezbollah members on its payroll. By denying that these two organizations are "terrorism supporting organizations", as they are identified in US law, UNRWA is able to keep their members on the payroll. Thus, when vetting employees, questions about membership or support of Hamas and Hezbollahare not asked nor is this information recorded.
In contrast to UNRWA's tolerance of Hamas and Hezballah activities, the PA and the Jordanian governments denounce Hamas terrorist activities and systematically carry out counter terrorism operations against them. A transfer of UNRWA's operations to the PA and the host governments, e.g. giving the PA control of UNRWA's schools and health care facilities in Gaza and the West Bank, would help weed out Hamas members and prevent terrorists from using schools and health clinics as shelters. Finally, UNRWA's damaging policies and its violation of section 301 (c) of US law should be taken into account regarding US contributions to UNRWA.
Conclusion: Alternatives to UNRWA
As we have shown, UNRWA's self proclaimed status, as the best available and most preferred provider of aid to the "Palestinian refugees" is wrong and misleading. We have also shown that UNRWA's operations are harmful and damaging to the self-reliance and autonomous governing of the PA. The redundancy of UNRWA was clear at the donor conference that took place in 2007 in Paris. The President of the PA, Mahmoud Abbas requested and was promised $ 7.4 billion in economic assistance, for three years (2008-2010). The representatives of the 90 donor nations agreed that the future of the Palestinian people is dependent on a strong and stable PA. The US Congressional Research Service observed that "Experts advised that the PA stability hinges on improved security, economic development, Israeli cooperation, and the continuation of high levels of foreign assistance."  The facts show that UNRWA's existence stands in the way of achieving all these goals. Notwithstanding, UNRWA continues to perpetuate the myth that it is the "best show in town."
The billions donated to UNRWA reduce the amount of money available for aid to the PA, making the PA a weaker potential partner for peace. To secure its permanent existence, UNRWA uses scare tactics warning of disastrous consequences to the peace process if its operations are curtailed. Consequently, no donor dares to reduce or cut UNRWA's burgeoning budget. UNRWA's theme of the imagined "five million distressed refugees" feeds the impossible demand for a "right of return." Following UNRWA's path, in a few years we could be facing a fantastical "10 million distressed refugee population," demanding a "right of return. By perpetuating this myth, UNRWA has become a major problem not a solution.
The US is the largest donor and it should expose UNRWA's misleading tactics. The US Congress has demanded transparency and accountability, to no avail. It is time to put a lid on donations to UNRWA,gradually phasing out of UNRWA's operations. A sixty-year entrenched bureaucracy has to be eliminated, and almost 30,000 UNRWA's employees could and should be integrated either in the relevant local governments or in the various international agencies that will take over UNRWA's operation. The process will encounter opposition. "Affected parties would ensure an active, vocal resistance in some quarters. But carefully managed, those sensitivities should not prevent a well-considered series of reforms from going forward." Critics might claim that a central role in the transition for UN and other international organizations will bring with it potential problems of interagency rivalry and bureaucratization. Also, there certainly exists no common vision among UNRWA, UNHCR, UNDP and others, as to what their respective contributions to a transition process might be. Even after decades of simultaneous operation, there is very little vision at all, about the ability of UN agencies (and UNRWA in particular) to plan for a phase out and transfer of responsibilities. UNRWA certainly will put up a fight to secure its bureaucratic survival. As early as 1995, when donors first seriously considered a gradual transfer of responsibilities, UNRWA vehemently objected to any change in its status. " A reduced UNRWA could have potential political consequences…for the Palestinian Authority, the host countries and the peace process itself."
However, resolving the refugee problem requires the termination of UNRWA's operation, and the US and the other major donors should not be intimidated by the political sensitivity surrounding most of the transition initiatives. The transition has to be carefully planned and the annual contributions should be gradually transferred from UNRWA to the regional, host governments. The roles and responsibilities of all the donors that will participate in the transition process should be discussed with the relevant local governments as well as with the US government. Proper bills will have to be passed. Congress, the White House and the Department of State, (USAID) will have to develop a coherent, coordinated plan of action.
We suggest that the execution of the transition be managed by an international working group that includes representatives of US government agencies, various relevant United Nations agencies, the World Bank, representatives of donor governments, in particular, the EC, representatives of UNRWA's Advisory Commission, and finally, representatives of Israel, the PA and the other host governments. The working group should divide the work among the members based on the expertise and the ability of each government and agency to contribute and take part in the transition period. UNRWA (or an UNRWA-successor agency calling upon some of the same staff and facilities) might play a temporary role, for example, in resettlement, economic development initiatives, the administration of refugee compensation, or other possible components of an Israeli-Palestinian agreement on the final resettlement of the refugee issue.
Other elements of the UN system can also contribute whether in conjunction with, or instead of, UNRWA. The process will require a substantial degree of interagency cooperation and coordination to assure an optimal and smooth transition. This is a complex process that should not be delayed or avoided. UNRWA has to be phased out, and only bold actions will yield the necessary results.
Nitza Nachmias is a Senior Research Fellow at The Jewish-Arab Center, University of Haifa and a Visiting Professor at the Department of Political Science, Towson University, Maryland.
 Webrelief document: "UNRWA at 60", A concept paper.
 Paragraph 7 of UNGA Resolution 302 (IV) of December 8, 1949, established the United Nations Relief and Works Agency (UNRWA) to administer the distribution of food, shelter, clothing, medical treatment, and education for the refugees. The U.N. General Assembly has renewed the UNRWA mandate ever since.
 See James G. Lindsay, "Fixing UNRWA", Policy Focus #91, The Washington Institute for Near East Policy, January 2009.
. "The Jalazon data show that half of the camp's household arrived from 1950 onward …and since then the movement into camps continued at a steady annual rate of about 1 percent. ..most of the families had never been in a camp and decided to move in because of advantages to be gained." Yoram Ben Porat and Emanuel Marx, "Some Sociological and economic aspects of refugees camps on the West Bank," A Ford Foundation Report (Santa Monica, Rand Corporation, August 1971), 9
…there is no logical or humanitarian argument to justify a UN organization providing services such as education, health,and welfare to citizens of a member state in a non-emergency situation." in James G. Lindsay, "Fixing UNRWA", 53
 UNRWA has accumulated a billion dollars in a pension fund, the "Providence Fund", controlled by the Commissioner General, and never mentioned in the Agency's annual Report.
 UNRWA's has a problem of double loyalty. "UNRWA's inexactitude of the data is due to …double loyalty of the local UNRWA staff." Baerwald, Paul. Survey of the Development and Structure of UNRWA 1948-1967: (Jerusalem, The Hebrew University, 1968), p. 5
 For example, since the creation of the Palestinian Authority in 1993, UNRWA has been competing for development contracts with the PA's Palestinian Economic Council for Development and Reconstruction (PECDAR).
. "Hamas is a social movement with thousands of activists…and it engages in extensive political and social activities." Glenn E. Robinson, "Hamas as Social Movement", in Quintan Wiktorowicz,(ed.): Islamic Activism,(Bloomington: Indiana University Press, 2004), 112
 1998 Report of the Commissioner General (July 1997-30 June 1998). Quoted in Barry Rubin at al. "UNRWA: Refugee of Rejectionism", A report from the Global Research in International Affairs (GLORIA) Center, May 8, 2008, p. 4.
 Efrat, Moshe. The Palestinian Refugees Social and Economic Survey: 1949-1974, (Tel Aviv University, unpublished Master's thesis, 1976), p. 13
. "Urges the governments of the countries in the area to assist, with due regard to their constitutional processes, in the carrying out of this program… (The program allocated $200 million) for reintegration over and above such contributions as may be made by local governments, to be carried out over a period of approximately three years starting as of 1 July, 1951." General assembly resolution #413. , 26 January, 1952
 The British government also considered Iraq as one of the countries that would absorb the refugees. Jacob Tovy, On Its Own Threshold, (Jerusalem: Ben Gurion Research Institute, 2008), p. 5
 UNRWA acknowledges that it provides aid to anyone in need. UNRWA's official cite, front page.
 United Nation Yearbook, 1987, p.325
 A GAO report of November 17, 2003
 UNRWA's response to these claims was less than satisfactory. See Andrew Whitley response to James G. Lindsay review of UNRWA's operations. Policy Watch # 1471: Special Policy Forum Report.
 Commissioner-General statement, Amman Jordan, 7 April 2009
 "This week thousands of children in Gaza will make an attempt to break the world record for the number of kites flying in the same place at the same time". UNRWA press release, 30 July, 2009.
 James G. Lindsay, Repairing the UN's Troubled System of Aid to Palestinian Refugee, Washington DC: The Washington Institute for Near East Policy, Policy Focus #91 | January 2009 p.27
 Plan is detailed in "UNRWA at 60" , UNRWA publication, p.3
 The World Bank. "Palestinian Economic Prospects: Gaza recovery and West Bank Revival." Economic Monitoring Report to the Ad Hoc Liaison Committee, June 8, 2009. 12.
 Webrelief document "UNRWA at 60" a concept paper.
 A workshop meeting: "The Future of UNRWA", held February 19-20 in Minster Lovell, U.K.
 Ibid,. Summary report, p.5
 Ibid,. Summary report, p.2
 Bob Bowker, "The Political Management of Change in UNRWA," presented at the Workshop on the future of UNRWA, Minster Lovell (UK), pp. 3-5
 Workshop on the future of UNRWA, 19-20 of February, 2000, in Minster Lovell, U.K. p.5
 That includes: $300 million for humanitarian aid to Palestinians in Gaza; $200 million in budget support for the PA; and $400 million to support the PA's Palestinian Reform and Development Plan in the West Bank.
 Jim Zanotti, CRS Report, February 20, 2009, p.2
 UN Office for the Coordination of Humanitarian Affairs, Sunday, 12 April, 2009
 A World Bank publication, June, 2008, www.worldbank.org
 Unlike UNRWA, UNDP employs only 300 primarily Palestinian staff members and the agency subcontracts its projects to local and international contractors.
 UNDP publication, 2008 (no date)
See details see "UNRWA and the transitional period: A five year perspective on the role of the Agency," UNRWA Horizon Report, Vienna, January 31, 1995.
 International law requires the host government to provide equal civil services to citizens and legal non citizens.
 Interviews in Jerusalem, with PASSIA officials, (Palestinian Academic Society for the Study of International Affairs) February, 2008
 Badil – Information & Discussion Brief, Issue No. 6, July 2000, p. 1
 In an interview to a Canadian radio station, 2004. The Jerusalem Post, January 31, 2009. www.jpost.com/servlet
 Matthew Levitt, "Broken aid to the Palestinian" January 30, 2009
 GAO Report, Washington D.C., November 17, 2003, 3
 James G. Lindsay, Repairing the UN's Troubled System of Aid to Palestinian Refugee, p.32
 Jim Zanotti, "US Foreign Aid to the Palestinian., p. 3
 Bob Bowker . Workshop on the future of UNRWA, Minster Lovell (UK), p. 6
 See "UNRWA and the transitional period: A five year perspective on the role of the Agency," UNRWA Horizon Report, Vienna, January 31, 1995.