Gaza’s largest field hospital operating with skeleton crew, forced to cut most services after USAID funding freeze

Aid organizations operating in the Gaza Strip are being forced to scale back programs or pay out of pocket after the Trump administration froze hundreds of millions of dollars in contractual payments as part of its cuts to USAID.

According to three USAID officials speaking on condition of anonymity for fear of retribution, the Trump administration approved over $383 million in funding on January 31 to ensure the survival of the tenuous ceasefire in Gaza.

But since then, they say that there have been no confirmed payments to any partners in the Middle East, leaving organizations without promised funds.

Senior officials at aid organizations say that they have spent millions of dollars on supplies and services out of pocket and cannot afford to continue operations indefinitely, while others are already being forced to lay off workers and scale down operations, according to internal USAID information shared with the AP.

Among the organizations impacted by the freeze is the International Medical Corps, a global nonprofit that provides medical and development assistance. It was awarded $12 million to continue operations at two hospitals in Gaza, including at the largest field hospital in the Strip, whose construction was funded by USAID at the request of the Israeli government.

It has now requested payback of over $1 million, says one USAID official, adding that the freeze has forced the organization to lay off some 700 staff members and offer only basic services at the hospitals, with a skeletal crew.

A former IMC staffer says the program providing life-saving treatment for malnutrition is almost frozen for lack of funds, and that the current nutrition services are at a minimum level.

Meanwhile, termination letters severing the contracts between USAID and Gaza partners have also been sent out to organizations that were major providers of shelter, child protection and logistical support in the Gaza aid operation, a USAID official says.

Some of the termination letters seen by the AP were signed by new USAID deputy chief Peter Marocco — a returning political appointee from Trump’s first term. They instruct organizations to “immediately cease” all activities and “avoid additional spending chargeable to the award,” citing a directive from Secretary of State Marco Rubio.