The leaders of 21 aid groups have written to the US administration to object to a decision to withhold $65m out of $125m in planned contributions to the UN agency for Palestinian refugees.
The letter warned of "dire consequences" if the cut to the UN Relief and Works Agency for Palestinian Refugees (UNRWA) was maintained, according to the letter seen by Al Jazeera on Thursday.
"We are deeply concerned by the humanitarian consequences of this decision on life-sustaining assistance to children, women and men in Jordan, Lebanon, Syria and the West Bank and Gaza Strip," it said.
"Whether it is emergency food aid, access to primary healthcare, access to primary education, or other critical support to vulnerable populations, there is no question that these cuts, if maintained, will have dire consequences."
The letter was sent on Wednesday to US Ambassador to the UN Nikki Haley, Secretary of State Rex Tillerson, National Security Advisor HR McMaster, and Secretary of Defence James Mattis.
It is wrong to punish political leaders by denying life-sustaining aid to civilians. This is a dangerous and striking departure from US policy on international humanitarian assistance which conflicts starkly with values that US administrations and the American people have embraced.
Eric Schwartz, president of Refugees International
Eric Schwartz, president of Refugees International and former US Assistant Secretary of State for Population, Refugees and Migration, said comments by Nikki Haley, the US ambassador to the UN, were aimed at punishing Palestinian political leaders and forcing them to make concessions.
"But it is wrong to punish political leaders by denying life-sustaining aid to civilians," he said in the letter.
"This is a dangerous and striking departure from US policy on international humanitarian assistance which conflicts starkly with values that US administrations and the American people have embraced."
In a series of tweets, Trump had said: "... We pay the Palestinians HUNDRED OF MILLIONS OF DOLLARS a year and get no appreciation or respect.
"... With the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?"