U.N. agency providing aid for Palestinians says Trump has withheld $305 million in funding.
(Corrects paragraph 5 to show budget deficit after clarification from the UN agency)
* UNRWA wins funding from Gulf countries after U.S. cuts
* Agency now seeking money from Europe; food aid at stake
By Robin Emmott
BRUSSELS, April 24 (Reuters) - Emergency food aid for around a million Palestinians in Gaza may run out from June if the U.N. agency for Palestinian refugees cannot raise another $200 million following a cut-off in U.S. funding, the agency said on Tuesday.
Pierre Kraehenbuehl, who heads the U.N. Relief and Works Agency (UNRWA) providing aid for Palestinians across the Middle East, said U.S. President Donald Trump had withheld $305 million in funding, far more than the $65 million reported in January.
"You already have a very, very fragile community (in Gaza)," Kraehenbuehl told Reuters in an interview during an international donor conference in Syria in Brussels.
"So if you suddenly have no certainty about the amount of food aid coming from the U.N. for a million people ... you can just imagine the kind of effects it could have," he said, although he stressed he was not justifying any link to potential outbreaks of unrest.
Gulf states, Norway, Turkey and Canada have stepped in with a total of $200 million to help meet a $446 million budget deficit for 2018. UNRWA's planned budget is over a billion dollars for 2018.
The United States, long the biggest donor to the agency, is providing just $60 million of a promised $365 million, Kraehenbuehl said.
That leaves a $200 million shortfall to fill for rice, flour, sugar and also to keep funding schools in Gaza and the West Bank and elsewhere in the Middle East.
The U.N. agency's call for help is made harder by the competing demands on donors for crises in Syria, Yemen, Myanmar, Afghanistan and the Democratic Republic of Congo, among others.
Kraehenbuehl warned of greater instability in Gaza in part because the economy is already suffering its deepest collapse after a decade of Israeli-led blockades, and internal Palestinian divisions in the coastal strip.
Kraehenbuehl said the shortfall in funding for the agency could also mean there may not be enough money to re-open schools in August and September for the new academic year.
"This is our largest funding crisis ever," he said.
More than two million Palestinians are packed into Gaza and while Israel withdrew its troops and settlers in 2005, it maintains tight control of Gaza's land and sea borders. Egypt also restricts movement in and out of Gaza on its border.
RAMADAN DONATIONS?
Trump withheld the aid to UNRWA in January after questioning the value of such funding, while the U.S. State Department said the agency needed to make unspecified reforms.
Many Western diplomats saw Trump's decision as a reaction to the condemnation across the Middle East of his Dec. 6 decision to recognise Jerusalem as Israel's capital and before any peace settlement between Israelis and Palestinians. The United Nations also voted to reject that recognition.
Kraehenbuehl, a Swiss national, said he had enacted spending cuts to contain costs within the agency and was trying to find new donors in the private sector. Those could be in Gulf countries, or donations made in solidarity with the Palestinians during the Muslim holy month of Ramadan.
Kraehenbuehl said that after donors such as Qatar, Turkey and the United Arab Emirates had come forward, he would now seek help from Germany, France, Sweden and Britain, travelling to Berlin later this week. Israel is not a contributor to UNRWA.
"It's a modest investment to preserving the region from future instability and uncertainty," he said.
(Reporting by Robin Emmott Editing by Catherine Evans)
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