The United States earlier this year cut its aid to UNRWA to $60 million from a promised $350 million for the year, saying the agency needed to make unspecified reforms and calling on the Palestinians to renew peace talks with Israel.
Tens of thousands of Palestinian children returned to United Nations-run schools after the summer holidays on Wednesday, though major US cuts have thrown their funding into jeopardy beyond next month.
Children wearing chequered uniforms and backpacks thronged schools across the Palestinian territories for the first classes of the new school year, AFP correspondents reported.
The UN Relief and Works Agency for Palestine refugees (UNRWA) said all 711 schools it runs for 526,000 pupils in Gaza and the West Bank, Jordan, Lebanon and Syria would reopen in the next few days despite the $300 million US funding cut.
Fears raised by UN chief Antonio Guterres that the schools might not be able to reopen at all failed to materialise, but UNRWA warned it might still be forced to close them again in a month if additional new funding is not found.
TRT World's Reagan Des Vignes reports.
"At the moment, we do not have enough money to keep the schools open after the end of September," UNRWA spokesman Chris Gunness said.
"At the end of September, UNRWA will be running on empty for all its services, including schools and medical facilities."
In 2017, the United States, which is traditionally the largest single donor to UNRWA, contributed more than $350 million.
But so far this year, it has given just $65 million following President Donald Trump's decision to withhold aid to the Palestinians.
Parents expressed deep concern about the uncertainty hanging over their children's education.
"We are afraid of the schools closing," Soha Abu Hasara said in Gaza City as she dropped her children off for their first day back at school.
"There is fear and the situation is not stable, and there is tension within UNRWA," she said.
TRT World spoke to the Director of Operations at the United Nations Relief and Works Agency, Scott Anderson, on how children will be affected.
UNRWA was formed to support the more than 700,000 Palestinians who fled or were expelled from their homes during the 1948 war that accompanied the creation of Israel.
With their descendants, they now number more than three million across the Middle East.
The United States has sought to use its aid to pressure the Palestinian government into resuming dealings with it after a nearly nine-month rupture.
The Palestinians have boycotted the US administration since it recognised Jerusalem as Israel's capital last December.
Last week, Trump cancelled a further $200 million in aid projects for Palestinians not funded through UNRWA.
Senior Palestinian official Hanan Ashrawi accused the US president of resorting to "cheap blackmail as a political tool."
Less than half of refugee children receive education
More than half the world's school-age refugees are excluded from education as host nations struggle under the weight of growing humanitarian crises, the United Nations said on Wednesday.
Four million refugee children around the world do not attend school, an increase of half a million from a year earlier, the UN Refugee Agency (UNHCR) said in a report.
"Education is a way to help young people heal, but it is also the way to revive entire countries," said the UN High Commissioner for Refugees Filippo Grandi.
"Based on current patterns, unless urgent investment is undertaken, hundreds of thousands more children will join these disturbing statistics."