The Trump administration on Tuesday announced the withholding of $65 million in aid for Palestinian refugees, insisting on “fundamental” reform in the U.N. agency responsible for administrating the aid programs.

The U.N. Relief and Works Agency was notified in a letter from the State Department that the U.S. is withholding $65 million of a planned $125 million funding contribution. According to the Associated Press, the letter declared that additional aid from the U.S. will be contingent upon major reform by UNRWA, which has been soundly criticized by Israel.

“We would like to see some reforms be made,” said State Department spokeswoman Heather Nauert, noting that changes must be made in agency operation and in the way the organization is funded. “This is not aimed at punishing anyone.”

In order to prevent UNRWA from running out of funding by the end of January and being forced to cease operations, the State Department announced that it was releasing the remainig $60 million of the installment.

The U.S. plan to withhold a portion of the contribution was supported by Secretary of State Rex Tillerson and Defense Secretary James Mattis, who offered it as a compromise to requests for stricter measures by U.N. Ambassador Nikki Haley, officials said.

Taking issue with the decision, UNRWA chief Pierre Krähenbühl said in a statement, “Given the long, trusted, and historic relationship between the United States and UNRWA, this reduced contribution threatens one of the most successful and innovative human development endeavors in the Middle East.”

As UNWRA’s largest donor, the U.S. supplies nearly 30 percent of its budget. The agency provides health care, education and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria and Lebanon.

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