A Palestinian boy walks near an UNRWA school sheltering displaced people that was hit in an an overnight Israeli strike, in Gaza City, July 5, 2025. (Dawoud Abu Alkas/Reuters)
"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.
UN UNDER FIRE AS USAID INVESTIGATORS PROBE HAMAS DIVERSION OF AID TO GAZA
United Nations Relief and Works Agency (UNRWA) building in Gaza, in June of 2023. (Ahmed Zakot/SOPA Images/LightRocket via Getty Images)
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.
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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.
Greg Wehner is a breaking news reporter for Fox News Digital.
Story tips and ideas can be sent to Greg.Wehner@Fox.com and on Twitter @GregWehner.
https://www.foxnews.com/politics/trump-admin-weighs-terrorism-sanctions-against-un-palestinian-aid-agency-over-hamas-allegations