The United Nations will stop paying wages to thousands of workers helping Palestinian refugees next month because of a growing cash crisis, a top U.N. official said Tuesday. The UN Relief and Works Agency (UNRWA), one of the U.N.'s oldest agencies, faces a "dire situation" with a $36 million deficit, under secretary general Jeffrey Feltman told the Security Council. "UNRWA will be unable to adequately fund its core services -- especially in education, health and poverty mitigation -- and will be unable to pay December salaries of its 30,000 teachers, medical personnel and social workers," Feltman said. The agency was set up in 1950 to help Palestinian refugees who lost their homes because of the 1948 Middle East conflict. It estimates that it now helps about five million people. The United States and European Union have traditionally been UNRWA's biggest donors to its two year budget of more than $1.2 billion. The agency also faces a crisis in the Hamas-controlled Gaza territory, after Israeli authorities discovered a tunnel from the besieged strip into Israel in October. Israel suspended the entry of all construction materials into Gaza and since then 19 out of 20 UNRWA construction projects in the territory have been halted. Feltman said the halt of the building work had "put thousands of people out of work" and called on Israel to reconsider its move.