The United States is ending all funding for the UN's Palestinian refugee agency, the US State Department says.
It described the organisation, the United Nations Relief and Works Agency (Unrwa), as "irredeemably flawed".
The US administration has "carefully reviewed" the issue and "will not make additional contributions to Unrwa," spokeswoman Heather Nauert said.
A spokesman for Palestinian President Mahmoud Abbas later said the move was an "assault" against his people.
"Such a punishment will not succeed to change the fact that the United States no longer has a role in the region and that it is not a part of the solution," Nabil Abu Rudeina told Reuters news agency.
He added that the decision was "a defiance of UN resolutions".
A spokesman for Unrwa, Chris Gunness, defended the agency in a series of tweets.
"We reject in the strongest possible terms the criticism that Unrwa's schools, health centres, and emergency assistance programs are 'irredeemably flawed'," he wrote.
A spokesman for Unrwa, Chris Gunness, defended the agency in a series of tweets.
"We reject in the strongest possible terms the criticism that Unrwa's schools, health centres, and emergency assistance programs are 'irredeemably flawed'," he wrote.
The latest move comes after the US announced back in January that it would withhold more than half of a tranche of funding for the agency.
What is Unrwa?
Unrwa was originally set up to take care of hundreds of thousands of Palestinians displaced by the 1948 Arab-Israeli war.
The agency currently supports more than five million people across the Middle East, including providing health care, education and social services.
The US has been the largest single donor to Unrwa, providing $368m (£284m) in 2016 and funding almost 30% of its operations in the region.
The Trump administration had pledged $60m to Unrwa in January, but withheld another $65m pending a review. That remaining payment of $65m is now expected to be cancelled./BBC