There has been criticism of the decision by the United States to withdraw funding from the United Nations Palestinian refugee agency (UNRWA).
A spokesman for Palestinian President Mahmoud Abbas denounced the decision as "a flagrant assault against the Palestinian people and a defiance of UN resolutions."
In Gaza, the Islamist group Hamas condemned the US move as a "grave escalation against the Palestinian people."
"The American decision aims to wipe out the right of return and is a grave US escalation against the Palestinian people," said a Hamas spokesman.
He said the "US leadership has become an enemy of our people and of our nation and we will not surrender before such unjust decisions."
Meanwhile Israel has welcomed the decision by the US, accusing the organisation which supports some five million Palestinians of perpetuating the Middle East conflict.
Israel and the US have accused the nearly 70-year-old agency of maintaining the idea that many Palestinians are refugees with a right to return to the homes from which they fled or were expelled during the 1948 war that accompanied Israel's creation, an idea they both oppose.
"Israel supports the US move," an official in Prime Minister Benjamin Netanyahu's office said.
"Consolidating the refugee status of Palestinians is one of the problems that perpetuates the conflict."
Meanwhile, Tánaiste and Minister for Foreign Affairs Simon Coveney has described the decision by the US as "heartless and dangerous."
In a statement, he said: "I believe this step both heartless and dangerous, and will impact negatively on the Middle East region. And I have made my views on this absolutely clear in contacts with the US administration."
UNRWA supports five million registered Palestinian refugees and provides schooling to 526,000 children in the Palestinian territories as well as in camps in Lebanon, Syria and Jordan.
UN Secretary General Antonio Guterres said the agency had his "full confidence" and called on "other countries to help fill the remaining financial gap, so that UNRWA can continue to provide this vital assistance."
UNRWA spokesman Chris Gunness tweeted: "We reject in the strongest possible terms the criticism that UNRWA's schools, health centres and emergency assistance programmes are 'irredeemably flawed."
Washington, which had already frozen $300 million in funding this year throwing the agency into financial crisis, said it would seek ways to prevent its decision from hurting "innocent Palestinians."
Israel expressed support for a new conduit for humanitarian assistance to the Palestinians.
"It would be good to allocate the funds to other elements that would use the money properly for the benefit of the population, and not for perpetuating the notion that they are refugees," the official in Mr Netanyahu's office said.
Additional reporting AFP