The US Government decision to stop funding a UN agency supporting Palestinian refugees is "amoral and unjust", according to the head of the World Council of Churches.

The US State Department announced the decision to stop funding the UN Relief and Works Agency for Palestinian refugees late last week, saying that it has previously made it clear "the United States was no longer willing to shoulder the very disproportionate share of the burden of UNRWA’s costs that we had assumed for many years" and that, with an "unsustainable" fundamental business model, the US would no longer commit funding to a "irredeemably flawed operation".

Following the announcement Pierre Krähenbühl, commissioner-general of UNRWA, expressed his "deep regret and disappointment" at the decision which reportedly leaves it with an almost $US450 million shortfall.

In a statement released this week, the WCC has called for the decision to be reversed.

Rev Dr Olav Fyske Tveit, general secretary of the World Council of Churches, said the decision effectively abandoned the Palestinian refugee population and blocked them from "the realisation of their inalienable human rights and legitimate aspirations for the future – including a viable two-state solution".

“As such, we consider the decision immoral and unjust, driving Palestinian refugees to more hopelessness, despair and desperation.”

He described the decision as "a serious politicisation of humanitarian aid".

"The responsibility for this protracted refugee crisis does not lie with UNRWA, but with the parties to the conflict and with the international community for their abject lack of will or ability to bring about a just peace in the region.”

The WCC is also calling on the international community to increase their commitment to supporting Palestinian refugees and for the UN to priortise maintaining essential human services to them.

UNWRA was established in 1949 by the UN General Assembly to provide humanitarian assistance and protection to Palestinian refugees. It currently offers services spanning everything from education and health care to food assistance and microfinance to more than 5.4 million Palestinian refugees in the West Bank including East Jerusalem, Gaza, Jordan, Lebanon and Syria.