The humanitarian crisis in Gaza is deepening as hundreds of millions of dollars in promised USAID funds remain frozen, leaving aid organisations struggling to maintain essential operations. The Trump administration’s sweeping cuts to USAID have blocked contractual payments, forcing humanitarian groups to pay out of pocket to sustain a fragile ceasefire, according to officials from the US humanitarian agency.
Aid freeze threatens ceasefire stability
The ceasefire agreement between Israel and Hamas, brokered by the United States, hinges on a steady flow of humanitarian aid. However, the ongoing funding freeze is placing immense strain on relief operations and threatening the tenuous truce. USAID had been designated to provide a significant portion of Gaza’s humanitarian assistance, with the Trump administration approving over $383 million for aid efforts on 31st January.
Despite this approval, no confirmed payments have been made to partner organisations in the Middle East, USAID officials revealed. These officials, speaking on condition of anonymity, described a chaotic situation in which aid groups that had already spent millions on critical supplies are now unable to continue their operations indefinitely.
Two senior officials from prominent aid organisations confirmed they have yet to receive the promised funds, forcing them to scale down operations. Internal USAID reports seen by the Associated Press indicate that some groups have already begun laying off workers and cutting back on essential services, exacerbating the humanitarian crisis.
Humanitarian operations at breaking point
The delays in funding have put severe pressure on organisations providing medical assistance, shelter, and food to Gaza’s population. Among those affected is the International Medical Corps (IMC), which was awarded $12 million to continue operations at two key hospitals in Gaza. One of these, the largest field hospital in the region, was constructed with USAID funding at the request of the Israeli government.
A USAID official disclosed that IMC has already requested reimbursement of over $1 million. However, the funding freeze has forced the organisation to lay off around 700 staff members, leaving only a skeletal crew to run the hospitals. A former IMC staffer described how life-saving treatments for malnutrition have been drastically reduced due to the lack of funds, leaving the most vulnerable without adequate care.
In addition to medical services, other crucial aid sectors are also suffering. Termination letters, seen by the AP, have been sent to organisations that were responsible for shelter provisions, child protection, and logistical support for the Gaza aid operation. These letters, signed by USAID’s deputy chief Peter Marocco, instruct partners to immediately halt activities, citing a directive from Secretary of State Marco Rubio.
Bureaucratic paralysis and internal chaos
Beyond the funding freeze, USAID has been plagued by internal disarray since the Trump administration’s restructuring of the agency. New arbitrary regulations and bureaucratic hurdles have slowed aid delivery, frustrating efforts to meet ceasefire commitments.
Under the terms of the ceasefire, Israel was required to allow at least 600 trucks of aid into Gaza daily, alongside 60,000 temporary homes and 200,000 tents. However, USAID’s procurement policies have been tightened, drastically reducing the number of temporary shelters entering Gaza. Two USAID officials confirmed that while the agency was originally supposed to provide 5,200 mobile homes during the ceasefire’s second phase, this number was cut to just over 1,000 due to newly imposed restrictions.
Further disruptions occurred on 2nd February when nearly 40% of the Gaza response team was locked out of their email accounts and software essential for processing payments and coordinating relief efforts. The access restriction, ordered by a staff member of the Department of Government Efficiency (DOGE), left USAID officials unable to approve transactions for crucial supplies. Though access was eventually restored, the team has since been significantly reduced through rounds of layoffs, leaving just six or seven staff members to manage the entire Gaza aid operation.
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A fragile truce at risk
The disruption of aid flows has already begun to impact the delicate ceasefire agreement. Hamas has accused Israel of violating the truce by failing to allow sufficient humanitarian aid into Gaza, a claim bolstered by the USAID delays. In response, Israel has tightened restrictions on aid shipments, further exacerbating the crisis. Prime Minister Benjamin Netanyahu has even suggested cutting off electricity supplies to increase pressure on Hamas.
With USAID in turmoil and humanitarian groups struggling to sustain operations, the United States’ influence in the region is waning. Dave Harden, a former USAID assistant administrator, warned that the US risks losing its ability to mediate effectively between Israelis and Palestinians.
“US aid assistance to Palestinians was never equal to that given to Israel, but it always ensured we had a seat at the table,” Harden said. “Now, we’re simply not part of the conversation in a meaningful way. The ceasefire is fragile, and without urgent action, it could collapse entirely.”
As Gaza’s humanitarian situation grows increasingly dire, aid organisations are calling for immediate intervention to unfreeze the promised funds. Whether the Trump administration will act remains uncertain, but without urgent relief, both the humanitarian and political crises in Gaza are set to deepen.
