The Trump administration's decision to scrap all future aid payments to the main agency helping Palestinian refugees marks a new – and most likely disastrous – chapter in the Israeli-Palestinian conflict.

The US State Department said on Friday it would no longer continue its $360 million annual contributions to the United Nations Relief and Works Agency for Palestine Refugees (UNRWA), depriving it of a third of its budget. US officials described the organisation as "irredeemably flawed".

The move follows an announcement last week that Washington had slashed $200 million from other aid programmes for the Palestinians.

About five million Palestinians – many languishing for decades in refugee camps across the Middle East – rely on the agency for essential food, healthcare and education.