The Trump administration is reportedly considering imposing terrorism-related sanctions on the United Nations agency responsible for Palestinian refugees, following allegations of its ties to Hamas. Discussions have taken place about potentially designating the agency as a foreign terrorist organization, a move that would be unprecedented given the United States' role in the United Nations. The agency, which provides vital aid and services to millions of Palestinians, has denied institutional wrongdoing but acknowledged firing several employees suspected of involvement in the October 7 attack.

Supporters of the agency warn that such sanctions could severely disrupt humanitarian relief efforts in Gaza and beyond, especially as the organization already faces a funding crisis. The debate has sparked internal disagreements within the State Department, with some officials voicing concerns about the humanitarian and legal implications of targeting an agency central to aid delivery in the region. No final decision has been made, and alternative sanction options are also under consideration.