The UN's agency for Palestinian refugees is the only reason Umm Mohamed could afford a C-section delivery, send her five children to school or have her rubbish collected.

So the massive funding cuts to UNRWA announced this week by the United States' pro-Israeli administration mean nothing less than catastrophe for the 42-year-old and her family.

"People are going to suffer a lot. We have no money for education or health care. Our only hope is UNRWA," said Umm Mohamed, standing in her living room in Burj al-Shmali camp, in southern Lebanon.

The agency, set up after the 1948 creation of Israel that drove huge numbers of Palestinians from their homes, faces what the UN has described as the "most severe" crisis in its history.

The United States held back $65 million that had been destined for UNRWA on Tuesday, two weeks after President Donald Trump threatened future payments.

The funding shortfall threatens the running of hundreds of schools and medical facilities for the roughly five million refugees living in UNRWA camps scattered across the Middle East.

Two weeks ago, Umm Mohamed had half of her medical testing expenses reimbursed by UNRWA. "What are people going to do now when it comes to health costs?," she wondered, a flowery grey veil framing her genial face.

Four of her children go to UNRWA schools and she is entitled to free visits to the doctor's.

- 'Thrown on the street' -

"If the schools close down, the children will be thrown on the street," her husband Freij said, sitting on his sofa in a grey tracksuit.

"UNRWA-supported education gives me some breathing space. I just can't afford to send them to other schools," he said.

His only income is from fixing and selling recycled furniture.

Freij's elder son dropped his business studies to join the masses of migrants seeking new opportunities in Europe and undertook the perilous boat crossing a few weeks ago, hoping he would soon be able to send money back to his parents.

A maze of narrow streets over which hangs a strong smell of sewage leads to their modest home.

Over the years and decades, Burj al-Shmali, which lies near the southern coastal city of Tyre, grew into a little town with shops, schools and multi-storey buildings.

According to a recent census, at least 174,000 Palestinians live in Lebanon. UNRWA's estimate is higher but in any event all depend on the agency for their survival.

Last year, 160,000 of them received care in UN-funded clinics and $14 million were disbursed to cover hospital fees.

Rubbish collection is supported by UNRWA, as are the maintenance of the infrastructure and sometimes home renovations.

- 'Catastrophic' -

"All these activities are at stake," Claudio Cordone, the Lebanon director of the Palestinian refugee agency, told AFP.

"If UNRWA cannot provide functioning clinics, cannot support people who are below the poverty line, if we have to close the schools you can see what is the impact on all these families and individuals."

The Norwegian Refugee Council warned it would be hugely difficult for aid groups to pick up the bill and fill the gaping vacuum left by reduced UN involvement.

"Cuts to UNRWA will have an incredible downstream effect on humanitarian aid agencies like NRC," the organisation's Lebanon spokesman, Mike Bruce, said.

The fate of the schools is one of the worst causes for alarm if donors fail to bridge the gap left by the US cuts, which compound a pre-existing funding crisis.

"There's already been several rounds of funding cuts, and another shock to that system is really a lot more than these communities can absorb," Bruce warned.

Iman Farat has been teaching in UNRWA schools for six years and the US announcement has left wondering about her future.

"Am I going to have work and get paid next month," asked the young English teacher. "Now they can just say bye-bye and tell me it's over. We're all very scared."

The schoolmaster, Jihad al-Khanaf, had little to say that would reassure her and could not rule out having to let go of Iman and 10 other teachers -- out of 24 -- with temporary contracts.

"A child who doesn't go to school here will end up in the street: that means drugs, terrorist groups. The situation we're facing is catastrophic," he said.