SHATI REFUGEE CAMP, Gaza Strip — Mahmoud al-Qouqa can’t imagine life without the three sacks of flour, cooking oil and other staples he receives from the United Nations every three months.

Living with 25 relatives in a crowded home in this teeming Gaza Strip slum, the meager rations provided by UNRWA, the U.N. agency for Palestinian refugee families, are the last thing keeping his family afloat in the territory hard hit by years of poverty and conflict. But that could be in danger as the U.S., UNRWA’s biggest donor, threatens to curtail funding.

“It will be like a disaster and no one can predict what the reaction will be,” al-Qouqa said.

Across the Middle East, millions of people who depend on UNRWA are bracing for the worst. The expected cut could also add instability to struggling host countries already coping with spillover from other regional crises.

UNRWA was established in the wake of the 1948 Mideast war surrounding Israel’s creation. An estimated 700,000 Palestinians fled or were forced from their homes in the fighting.

In the absence of a solution for these refugees, the U.N. General Assembly has repeatedly renewed UNRWA’s mandate, the original refugee camps have turned into concrete slums and more than 5 million refugees and their descendants now rely on the agency for services including education, health care and food. The largest populations are in Gaza, the West Bank, Jordan and Lebanon.

Seen by the Palestinians and most of the international community as providing a valuable safety net, UNRWA is viewed far differently by Israel.

Prime Minister Benjamin Netanyahu accuses the agency of perpetuating the conflict by helping promote an unrealistic dream that these people have the “right of return” to long-lost properties in what is now Israel.

“UNRWA is part of the problem, not part of the solution,” he told foreign journalists last week. Noting that the Palestinians are the only group served by a specific refugee agency, he said UNRWA should be abolished and its responsibilities taken over by the main U.N. refugee agency.