(CNSNews.com) – After intervention by the State Department, the Senate Appropriations Committee on Thursday reworked an amendment to a foreign operations appropriations bill, watering down language that sought to establish the actual number of Palestinians that could legitimately be called refugees.

The issue of millions of “Palestinian refugees” and their claimed “right of return” to the places they left during the Arab-initiated war on the newly declared state of Israel in 1948 is one of the most sensitive “final status” issues to be resolved in any negotiated Israeli-Palestinian settlement.

An amendment by Sen. Mark Kirk (R-Ill.) aimed to distinguish between those Palestinian refugees who were alive at the time and “were personally displaced as a result of the 1948 Arab-Israeli conflict,” and their millions of descendants.

It also sought information on how many Palestinians currently receiving assistance from the U.N. Relief and Works Agency for Palestinian Refugees (UNRWA) live in the West Bank and Gaza – in other words, under Palestinian Authority (P.A.) rule – and how many live elsewhere, as well as information pertaining to citizenship.

The U.S. is UNRWA’s largest bilateral donor, providing it with almost $250 million in 2011. Since 1950, American taxpayers have accounted for more $4 billion in contributions to UNRWA.

The Kirk amendment did not link the requested data to any potential cuts to funding for UNRWA, but merely required the secretary of state within one year to produce a report with number counts of UNRWA beneficiaries in those various categories.

Nonetheless the State Department firmly opposed the move. The chairman of the Appropriations subcommittee on State and foreign operations, Sen. Patrick Leahy (D-Vt.) read out excerpts from a letter from deputy secretary of state Thomas Nides, urging the senators to reject the amendment.

Nides argued that the status of Palestinian refugees “strikes a deep, emotional, chord among Palestinians and their supporters, including our regional allies,” noting that Jordan and Lebanon both host large populations of refugees.

“This proposed amendment would be viewed around the world as the United States acting to prejudge and determine the outcome of this sensitive issue,” he wrote.

Leahy told the committee that the study required by the Kirk amendment would probably cost “millions of dollars” and be seen in the Middle East as highly “provocative.”

The amendment would be interpreted as suggesting that Jordan, Lebanon and the P.A. “should take over caring for these people who UNRWA currently cares for, which neither Jordan or Lebanon or the Palestinian Authority are capable of doing,” he said.

Leahy said he had also spoken to the Jordanian ambassador about his government’s concerns.

But subcommittee ranking member Sen. Lindsey Graham (R-S.C.) – speaking on behalf of Kirk who is recovering from a stroke – said that what supporters of the amendment “would like to know after all these years – what sort of inventory, who are in these camps and whether or not our money’s going to the targeted populations.”

Leahy then proposed a reworked amendment, requiring the report to indicate the approximate number of people receiving aid from UNRWA over the previous year who had been displaced by the 1948 conflict, and the number of those who were their descendants. The report would also have to indicate “the extent to which the provision of such services to such persons furthers the security interests of the United States and of other United States allies in the Middle East.”

Leahy’s language was accepted and added to the fiscal year 2013 bill, which was then approved by the committee. Overall the bill totals $52.1 billion – $2.6 billion less than the administration’s request and $1.2 billion less than the FY2012 appropriation.

From 750,000 to five million and counting

UNRWA is unique in that it is the only U.N. agency that deal exclusively with one group of refugees. All other refugees around the world fall under the aegis of the U.N. High Commissioner for Refugees.

Also unique is the definition the U.N. uses – any Arab who had lived in the area for just two years before having “lost both their homes and means of livelihood as a result of the 1948 Arab-Israeli conflict” is regarded a Palestinian refugee. Later the definition was broadened to include their offspring.

UNRWA’s definition also does not account for the Palestinians – many of the two million in Jordan, for example – who have acquired citizenship of other countries. (Article one of the 1951 U.N. Refugee Convention states that refugee definition ceases to apply where a person “has acquired a new nationality, and enjoys the protection of the country of his new nationality.”)

According to Israel figures, an estimated 580,000 Arabs left their homes during the conflict, while Palestinian and U.N. figures at the time put the estimated number at 914,000. Some experts say the likeliest true number is about halfway between those estimates, around 750,000.

Today, UNRWA says there are more than five million “Palestinian refugees” in Gaza, the West Bank, Lebanon, Syria, and Jordan.

Israeli governments have long argued that the influx of so many Palestinians would permanently alter Israel’s demographics, and that they should be accommodated in a future Palestinian state and/or in neighboring Arab countries where many already live.

‘A force for stability’

With headquarters in Gaza and Amman, Jordan, UNRWA employs almost 30,000 staff, mostly locally-hired Palestinians. More than half of its staffers run schools and training centers.

UNRWA has long been a target for critics who see it as perpetuating the refugee situation – in collaboration with Arab governments – rather than focusing on rehabilitating and resettling refugees.

Appropriations bills in past years have cited concerns that U.S. funding may end up benefitting terrorists. In 2003, for instance, legislation required that UNRWA take all steps possible to ensure that no U.S. money helps any refugee who a member of any “guerrilla type organization or who has engaged in any act of terrorism.”

The Government Accountability Office was required to report on the matter, and found that the State Department did get UNRWA to certify that it was taking all possible steps to comply, but also found that “UNRWA does not ask beneficiaries if they are terrorists, owing to concerns for its staff’s safety and its inability to verify beneficiary responses.”

In Gaza, UNRWA’s relations with Hamas – the terrorist group that controls the territory – have been mixed. Hamas for years dominated the UNRWA schools’ teachers union in Gaza, a situation critics said was feeding anti-Israeli incitement in schools.

More recently, relations between the U.N. body and Hamas have undergone tensions, with the Islamist group trying to pressurize UNRWA to reduce the involvement of girls and women in public events.

In his letter to the senators, Nides of the State Department described UNRWA as “a force for stability in the region.”

“UNRWA’s institutions and programs serve as important counterweights to extremist organizations such as Hamas and Hezbollah, and any void left by UNRWA would be likely [sic] be filled by terrorist elements,” he wrote.