1ST LEAD US freezes 65 million dollars for UN's Palestine aid programme By Helen Corbett, dpa

New York (dpa) - The US has cut its aid contribution to a UN refugee agency for Palestinians and will withhold tens of millions until reforms are made, the State Department announced on Tuesday.Although the US has earmarked 60 million dollars for the agency for 2018, it plans to withhold 65 million dollars. Those funds are "frozen for future consideration," State Department spokeswoman Heather Nauert told reporters.Trump tweeted two weeks ago that the US pays the Palestinians hundreds of millions of dollars a year and gets "no appreciation or respect," in what was interpreted as a threat to UNRWA.The move follows Trump‘s controversial decision to officially recognize Jerusalem as the capital of Israel."This is not aimed at punishing anyone," Nauert said. But the US wants to see revisions to how the agency operates and to see other countries sharing the burden of funding the agency, including those who criticized the decision on Jerusalem, Nauert said. UN Secretary General Antonio Guterres said he was "very concerned" about the impact of potential US budget cuts to the agency ahead of the announcement."First of all, UNRWA is not a Palestinian institution, UNRWA is a UN institution," Guterres said.If UNRWA is not in a position to provide "vital services" and emergency support it will create a "very very serious problem," the UN chief said.The US has been the largest bilateral donor to the agency since 1949 and one of its most reliable supporters.Figures from UNRWA show that the US paid around 368 million dollars to the agency, for a total budget of roughly 1.2 billion dollars in 2016.