Vital supplies of fuel and bread flour for Gaza risk running out, while schools, clinics and even rubbish collections in the West Bank and three countries across the Middle East could cease operating by the end of the month if funding cuts for UNRWA are not restored, the UN’s agency for Palestinian refugees has warned. Multiple countries, including the US and the UK, have paused funding for the agency in recent days after accusations that 12 of its staff took part in the 7 October attack by Hamas on Israel. On Thursday the agency warned that its entire operations in the Middle East, not only in Gaza, would most likely be forced to shut down by the end of February if funding remained suspended. In Gaza, where the UN has warned of an imminent famine affecting 2 million people, UNRWA delivers flour to make bread, and fuel for desalination plants, and runs networks of warehouses and lorries for aid. UNWRA-run schools have transformed into shelters housing tens of thousands of people. UNRWA also runs hundreds of schools in the West Bank, Jordan, Lebanon and Syria. If the agency completely stops operating, these schools would close, leaving an estimated 500,000 children without education. The already fragile situation in Palestinian refugee camps across the West Bank and Lebanon could disintegrate into instability if UNRWA stops providing services to them, observers have said. “The impact is going to be felt throughout the region. It will, however, be most acute in Gaza,” said Juliette Touma, director of communications for UNRWA. “Right now we are the largest humanitarian player there, without question, and it’s very hard to imagine the people of Gaza surviving without UNRWA with everything that they are going through now.” Other aid agencies in Gaza that are dependent on UNRWA for coordinating aid supplies would struggle to cope if it stopped functioning. “They all rely in one way or another on UNRWA,” said Touma. “For example, Unicef brings in children’s vaccines, but the people who administer them, who put the jab in kids’ arms, are UNRWA nurses.” Sixteen donor states suspended funding as a result of the Hamas allegations. Three of those – the US, Germany and Sweden – gave a combined sum of $607m (£475m) in 2022. Other donor entities, including the EU, have said they will make a decision about whether to continue funding after learning the results of a UN investigation into the allegations. The agency currently estimates that the donor suspensions have cost it at least $440m. UNRWA has dealt with big financial shortfalls before, notably when the Trump administration cut its support in 2018, but it has rarely, if ever, faced a looming funding gap of this size. Israeli authorities have long called for the agency to be dismantled, arguing that its mission is obsolete and fosters anti-Israeli sentiment, something UNRWA has vigorously denied. On Wednesday, the Israeli prime minister, Benjamin Netanyahu, reiterated his call to terminate UNRWA’s mandate and to replace it with other UN or non-UN aid agencies. For many Palestinians, however, UNRWA’s presence in the Middle East is a constant reminder of how Palestinians were displaced during the creation of Israel in 1948. “UNRWA is not just a UN agency that provides aid, it is part of our cause, a reminder for the world that millions of Palestinians are still refugees,” said Maha Husseini, a humanitarian with EuroMed for Human Rights who is sheltering in Rafah, in southern Gaza. “This is a time when Palestinians are most in need for the support of UNRWA.” Touma said now was not the time to change how aid got into Gaza. “It’s not the time because this is a matter of life and death – the clock is ticking and fast,” she said. The UN secretary general, António Guterres, held a closed-door meeting with 35 donor nations earlier this week in an attempt to encourage those who have suspended funding to reconsider, while also seeking new financial support for UNRWA. Stéphane Dujarric, Guterres’ spokesperson, said that UN staff were yet to receive a dossier compiled by Israel detailing claims against the 12 UNRWA employees. Daniel Forti, a specialist on the UN at the International Crisis Group, said the process of internal investigation at the UN is likely to be long, but “the longer it takes for Israel to make a formal submission of this dossier, the harder it gets for the UN to do this investigative work”. This in turn could delay the reassurance donors are seeking before reinstating funding, prolonging the risk to UNRWA’s operations, he added. Joost Hiltermann, Middle East programme director for ICG, said that a sudden shock like the shutdown of UNRWA could spark protests in places like Lebanon and Jordan. In the West Bank, protests could result in deadly clashes with Israeli or Palestinian Authority security forces. “You would see major instability, that’s the bottom line – these services matter a great deal,” he said.