The U.S. later denied the report, saying the funding was still "under review".
Haaretz said, according to the PNN, that Netanyahu's bureau said, over the weekend, that the prime minister "supports a critical approach by President Trump and believes that practical steps must be taken to change the situation in which UNRWA perpetuates the Palestinian refugee problem instead of resolving it".
However, a senior U.S. administration official denied on Sunday that a decision has been made on cutting aid to UNRWA. Gunness said the agency had not been "informed directly of a formal decision either way by the US administration" on cuts.
"I fully agree with President Trump's strong criticism of UNRWA", Netanyahu declared.
The prime minister said millions of refugees around the world are aided by the UN High Commissioner for Refugees (UNHCR) but Netanyahu slammed UNRWA as an exclusive aid agency for the Palestinians that also treats "great-grandchildren of refugees - who aren't refugees". "It also perpetuates the narrative of the so-called "right of return" with the aim of eliminating the State of Israel, and therefore UNRWA must disappear". The report suggested that Netanyahu would prefer that the funding cut be implemented gradually.More news: Why People Are Calling Out James Franco After the Golden Globes
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Netanyahu at his Sunday weekly Cabinet meeting also reiterated support for Trump's threat to cut aid to Palestinians.
The U.S.is UNRWA's single largest donor, providing about $300 million annually.
Hundreds of thousands of Palestinians either fled or were forced from their homes during the war that led to Israel's establishment in 1948.
Referring to the UN General Assembly vote which rejected the unilateral USA decision of declaring Jerusalem as the capital of Israel, the statement said, "Netanyahu also thanked the President of Romania and the Polish Prime Minister for their abstention in the UN vote".
Trump angered the Palestinians last week when he threatened in a pair of tweets to cut funding to the United Nations agency that handles Palestinian refugees if the Palestinian Authority doesn't talk peace with Israel. Moreover, it said that in at least two cases terrorists "probably" fired rockets at Israel from the schools during the 50-day summer conflict in 2014 between Israel and Hamas.