Days after President Donald Trump threatened to withhold future aid payments to Palestinians, Axiossaid the funding was frozen until the USA government finishes its review of aid to the Palestinian Authority.
Israeli and global reports reported the United States' intention to freeze or delay its financial fund to UNRWA and stop aid to the Palestinians until they return to the negotiations table with Israel.
US -brokered peace talks between Israel and the Palestinians collapsed in 2014 and a bid by President Donald Trump's administration to restart them have shown little sign of progress.
"We will confront the decision by seeking a (UN) resolution, an worldwide one, to recognize a Palestinian state on 1967 borders with Jerusalem as its capital", said Safadi according to Agence France Presse. Since then, protests have raged across Israel with global organizations joining the fight in support of Palestinians.
The status of Jerusalem, home to sites holy to Muslims, Jews and Christians, is one of the core issues in the Israeli-Palestinian conflict.
It also distributes aid and provides teacher training centres, health clinics and social services.
Illustrative Palestinian girls at a UNRWA school in Gaza
Trump's threat against UNRWA funding was popular in Israel, even though government security officials warned that it could fuel violence and strengthen radical Palestinian forces in the West Bank, said Jonathan Rynhold, director of Bar Ilan University's Argov Center for the Study of Israel and the Jewish People.
'Seventy years of confrontation make more urgent than ever the need for a political solution that allows the presence in the region of two independent states within internationally recognised borders. The U.S. later denied the report, saying the funding was still "under review".
The U.S. donated $355 million to UNRWA in 2016, almost 30 percent of its total funding.
Some Israeli politicians have pressed Washington to curtail the funding, arguing that UNRWA's schools have been used by Hamas militants in Gaza to hide tunnels and rockets intended for use in attacks on Israel.
But Israel would not welcome having to provide the kinds of services financed by US aid to UNRWA. Senior Palestinian officials said this was blackmail, and so it would appear.
"No one can imagine that Netanyahu's incitement against UNRWA could reach such a level", he said, adding that "Netanyahu would not have said this if it wasn't for the recent American statements regarding Washington's intention to end its contribution to UNRWA".
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