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RACHEL MARTIN, HOST:

This is WEEKEND EDITION from NPR News. I'm Rachel Martin.

We're going to begin this hour in the Middle East, where the primary agency taking care of Palestinian refugees around the region is running out of money. For more than 60 years, the U.N. Relief and Works Agency has run schools and clinics that serve some five million Palestinians. But as of this month, it won't have enough money to pay local salaries. The shortfall could affect 30,000 teachers and health care workers, and the people using their services in Lebanon, Syria, Jordan and the Palestinian territories.

NPR's Emily Harris has this story from the West Bank.

EMILY HARRIS, BYLINE: Sit for an hour in the United Nations Relief and Works Agency office in the al-Amari Camp for Palestinian refugees, you'll get a sense of what people expect the agency to provide.

MEHEDIN SHEIKH KASSAM: (Foreign language spoken)

HARRIS: An old woman asks where she can pick up food basics next month. An aunt wants to get her grown nephew his own refugee card. An unemployed carpenter, Mehedin Sheik Kassam, wants help finding work.

KASSAM: (Through Translator) I am 55 years old. I have lived in this camp all my life. The U.N. is supposed to support all aspects of our lives: health, economy, education.

(SOUNDBITE OF A CRYING CHILD)

HARRIS: The agency's general fund pays for health clinics and schools for some five million Palestinian refugees across the Mideast. The budget shortfall would affect salaries of the people who work in those places. Agency director Filippo Grandi says there's always a cash crunch toward the end of the year.

FILIPPO GRANDI: In past years, toward the end of the year, governments usually have some spare money, unspent money. But this year - especially with Syria draining a lot of, well, absorbing a lot I should say of humanitarian resources - it has become difficult for governments to help us.

HARRIS: For the past two years, first Britain, then the European Union let the agency borrow against future contributions to cover a year-end gap. But that doesn't make sense to an official from the single-biggest donor country, the United States.

Guy Lawson is U.S. regional coordinator for Palestinian refugees.

GUY LAWSON: We try to provide our contributions very early in year. And we try to do it in a way that allows them to plan and program effectively. But I don't - you know, if we use our 2014 contributions to meet 2013 needs, then the needs will just become greater in 2014.

HARRIS: Adding pressure right now in the West Bank and Gaza is a union request for salary increases for local U.N. employees - all refugees themselves. Mohammad Khatami has worked for the agency for 22 years.

MOHAMMAD KHATAMI: (Through Translator) The U.N. is responsible for me and my children. We have to think about the people who provide refugee services. I need to be paid to keep the whole system healthy.

HARRIS: Local U.N. workers have gone on strike over pay disputes in the past. There have also been protests when the U.N. has cut or limited programs.

(SOUNDBITE OF CHILDREN PLAYING)

HARRIS: Some Palestinian refugees have built lives outside of camps. In a family compound not far from the Qalandiya camp, young cousins race across a mosaic courtyard. Their fathers' family left Qalandiya 35 years ago and became successful contractors. They are still eligible for U.N. schools and clinics.

Amal Abu Isba, who married in to the family, says they used to get food like sardines, flour and oil from the U.N. She wishes they still did.

AMAL ABU ISBA: (Through Translator) Even though I don't need the food supplies, I still feel it is my right because they used to give it to me and I am still a refugee.

HARRIS: Major donors say they want the agency to be more efficient and take a hard look at what it can really provide, as the number of registered Palestinian refugees continues to grow. Agency head Filippo Grandi says he tells donors the only real solution is to resolve the Israeli-Palestinian conflict.

GRANDI: I'm telling them, if you want to stop this bleeding of money to a very old problem, the answer is not to stop that funding. The answer is to solve the problem where it needs to be solved - which is in the political sphere.

HARRIS: If the U.N. cannot meet payroll, by payday, the third week in December, Grandi isn't sure what will happen. Maybe, he says, staff will work without pay - at least until January, when next year's donations are in.

Emily Harris, NPR News.

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