The European Union deemed as “regrettable” Washington’s decision to stop funding the UN Relief and Works Agency (UNRWA), hoping that it would reconsider.
"The regrettable decision of the US to no longer be part of this international and multilateral effort leaves a substantial gap," a spokesperson for the EU's diplomatic service said in a statement.
"And we hope that the US can reconsider their decision," said the spokesperson for the European External Action Service.
"The EU will continue to engage with the US and its other regional and international partners to work towards that common goal."
The UNWRA runs schools for hundreds of Palestinian children across the Palestinian territories, Jordan, Lebanon and Syria.
Washington has long been UNRWA's largest donor but is "no longer willing to shoulder the very disproportionate share of the burden," State Department spokeswoman Heather Nauert said in a statement on Friday.
The 28-nation EU, the biggest collective contributor to UNWRA, said it will discuss with its international partners "how to ensure sustainable, continued and effective assistance to the Palestinians, including through UNRWA," in the runup to the UN General Assembly this month.
Palestinians reacted angrily Saturday to the US decision and described as "cruel and irresponsible" by senior Palestinian official Hanan Ashrawi.
"The Palestinian refugees are already the victims who have lost their homes, livelihoods and security as a result of the creation of the state of Israel," she said.
Chief Palestinian negotiator Saeb Erekat said the American administration was invalidating future peace talks by "preempting, prejudging issues reserved for permanent status" negotiations.
Palestinian and Israeli "elements that want to achieve peace peacefully, based on a two states solution, are being destroyed," he told AFP.
Israel however welcomed the US move.
"Consolidating the refugee status of Palestinians is one of the problems that perpetuates the conflict," an official in Prime Minister Benjamin Netanyahu's office said.
Palestinian presidential spokesman Nabil Abu Rudeina said Washington's latest decision "promotes terrorism" and was a violation of UN resolutions.
He said Palestinian president Mahmud Abbas was considering appealing to the United Nations General Assembly and Security Council "to challenge" the decision.
Mahmoud Mubarak, director of the community-run committees that run the 19 refugee camps in the West Bank which accommodate some 500,000 Palestinians, warned of the "very serious repercussions" of the US move.
In the impoverished Gaza Strip, where most children attend UNRWA schools, 55-year-old Hisham Saqallah said Washington’s move was "political blackmail" that would merely increase unrest.
"If they stop aid to schools, this means destroying the futures of a large number of students and throwing them into the street," he said.
Abu Mohammed Huweila, whose nine children have all attended UNRWA schools, agreed and called the US move "unjust".
UNRWA spokesman Chris Gunness said the agency would try to make up a $217 million shortfall.
"If not, some of the most marginalized and vulnerable people on the planet may well suffer," he told AFP.
"People are going to become more desperate and marginalized," he said, warning of "dramatic, widespread, profound and unpredictable" consequences.
