No 'plan B' once Palestinian aid agency funds end in March, its Lebanon head says

By Maya Gebeily and Emilie Madi

BEIRUT (Reuters) - The United Nations agency for Palestinian refugees has no "plan B" past March should donor countries that withheld funding following Israeli allegations uphold their suspensions, the head of its Lebanon office said on Thursday.

Israel accused 12 of UNRWA's 13,000 employees in the Gaza Strip of taking part in the Hamas-led assault on Israel last year. The claims came after years of Israeli calls for the agency to be disbanded, and as Gazans face widespread hunger and only a trickle of aid into the bombarded strip.

Sixteen countries suspended funding pending an investigation by the U.N.'s oversight office that Lebanon chief Dorothee Klaus said would be ready in a few weeks.

"We hope that as many donors as possible indicate to the agency that they are reconsidering the funding freeze, and that funding will be restored to the agency, hopefully in such a way that we don't have a cash flow issue, and services continue uninterrupted," she said.

"We do not have a plan B."

Already, her office may not be able to finance its quarterly cash distribution to 65% of Palestinian refugees in Lebanon.

"This will be the first indicator to the community that UNRWA is cash-strapped, and this would be the first service that we will not be able to provide in quarter one," Klaus said.

While UNRWA has faced cash crunches before, the collective suspension has prompted an unprecedented crisis and it would be wrong to think other agencies could fill the gap, she said.

In Lebanon, UNRWA manages 12 camps for refugees, providing services from healthcare and schooling to garbage collection. If funding dries up, within a couple of days there would be trash filling camp streets, Klaus said.

Israel's allegations have also prompted a separate review process by UNRWA that she said would examine safeguards protecting its neutrality and independence.

Asked if that would involve an examination of possible affiliations to armed groups of UNRWA staff in Lebanon's camps, Klaus said she expected her branch would be consulted.

(Reporting by Maya Gebeily and Emilie Madi; Editing by Andrew Cawthorne)