Israel-Gaza updates: Hamas has received proposed hostage deal, Qatar says

The United Nations Relief and Works Agency for Palestine Refugees in the Near East warned Thursday that it "will most likely be forced to shut down" its operations in the war-torn Gaza Strip and the wider region "by the end of February" if funding does not resume.

Sixteen donor countries, including the United States, have suspended financial support to the U.N. agency over Israel's allegations that 13 UNRWA staff members were involved in the Hamas-led Oct. 7 terror attack. UNRWA said it is investigating the accusations and that "full accountability and transparency are expected out of this process, should the allegations be substantiated."

"As the war in Gaza is being pursued unabated, and at the time the International Court of Justice calls for more humanitarian assistance, it is the time to reinforce and not to weaken UNRWA. The Agency remains the largest aid organization in one of the most severe and complex humanitarian crises in the world," UNRWA Commissioner-General Philippe Lazzarini said in a statement Thursday. "I echo the call of the U.N. Secretary General Antonio Guterres to resume funding to UNRWA. If the funding remains suspended, we will most likely be forced to shut down our operations by end of February not only in Gaza but also across the region."

-ABC News' Morgan Winsor

Before the war, roughly two-thirds of Gaza residents were reliant on food aid, according to the World Food Program.

Now, roughly 577,000 people in Gaza, or 26% of the population, are starving, according to Arif Husain, the chief economist for WFP.

"If things continue as they are, or if things worsen, we are looking at a full-fledged famine within the next six months," he told ABC News.

Maryam al-Dahdough, a mother of four who is pregnant with another child, was one of the thousand people who line up daily at a soup kitchen in Rafah in southern Gaza.

She told ABC News that she has not eaten eggs, milk or anything healthy for three months and it's been worse for her other children.

"Fever, vomiting, diarrhea all day, not a single one of them is healthy," she said.

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National Security Council spokesperson John Kirby was tight-lipped Wednesday about ongoing hostage negotiations, stressing that he did not want anything to jeopardize any progress.

"I will tell you that, in broad strokes, we are looking at an extended pause," he said. "How long? That's all part of the discussions, but longer than what we saw in November, which was about a week. We'd like to see a longer pause than that. Not just because that helps facilitate the movement of so many more hostages out … but so it can also give us an opportunity to increase the flow of humanitarian assistance in.”

Asked if President Joe Biden is holding off on retaliatory strikes after a drone attack killed three American service members in Jordan this weekend, to give time and safe space for the ongoing hostage negotiations, Kirby insisted that the U.S. would continue to move forward on both.

"This is hard diplomatic work that’s going into trying to get those hostages out," Kirby said. "It's hard, but that doesn't mean that you put the brakes on that. … And it doesn't mean that you don't respond to the attacks in Jordan. … We can and we will do both."

-ABC News’ Molly Nagle

State Department spokesperson Matthew Miller declined to outright confirm or deny a report from Axios claiming that Secretary of State Antony Blinken ordered a review of options for recognizing Palestinian statehood, but Miller said the State Department has an "ongoing policy planning process" examining the matter.

"There has been no policy shift in the administration -- we have made quite clear publicly that we support the establishment of an independent Palestinian state," Miller said. "That's been the policy of the United States for some time."

"We do a lot of work inside the government to think about how to bring that about," Miller said regarding Palestinian statehood recognition. "We look at any number of options. That’s part of the normal planning process. The vast majority of options never usually get implemented."

-ABC News’ Shannon Crawford