US President Donald Trump’s statement last week during the State of the Union address, that “US aid is only for friends and must serve American interests,” is yet another sign of the unprecedented shift taking place in American policy. This proclamation, alongside recent reports according to which the Trump administration is now prepared to completely halt American funding to the United Nations Relief and Works Agency (UNRWA) due to the organization’s problematic definition of refugee, might constitute as a game-changing moment for peace in the Middle East.Unlike the United Nations High Commissioner for Refugees (UNHCR), which deals with all other refugees in the world, UNRWA created a special and privileged definition for Palestinian refugees which has meant the number of UNRWA recipients is now an impossibly large 5.3 million.This artificial refugee status, even disputed by a recent census in Lebanon undertaken by Lebanese and Palestinian officials, means that this number will continue growing exponentially, making the conflict increasingly impossible to solve. The greater the number of refugees, the more difficult it will be to find a durable solution to their status, even if UNRWA wished to find one, which it doesn’t.Secondly, it breeds a victim mentality and feeds in, through incitement and rejectionism spread throughout the UNRWA school system, to the belief that they will all be able to “return” to Israel, and end the existence of the Jewish state.This means as long as UNRWA continues to act in this manner, the conflict will continue and Palestinian rejectionism will increase.After Palestinian Authority President Mahmoud Abbas’ recent rantings against Zionism and Jewish self-determination, that for the Palestinian leadership, land, borders, settlements and even Jerusalem have never been the real issues and obstacles is now abundantly clear; Palestinian rejectionism is the root of the conflict.Like his predecessors stretching back over century, Abbas has a problem with the very concept that the Jewish people have a basic right to sovereignty in their ancestral homeland. This is why he and other Palestinians are always trying to undercut this right with their pseudo-history claiming ancestry from the Canaanites, Philistines, Jebusites, or whatever ancient people they learn about.This means that the conflict will only end, like all other conflicts in history, when the party that created it understands its goals can no longer be met and accepts defeat in its maximalist endeavors.The Israel Victory Project, created last year by the Middle East Forum, a US-based organization promoting American interests in the region, calls for delaying diplomacy until the Palestinians truly and finally give up their effort to eliminate the Jewish state.Thus, UNRWA, an organization which perpetuates rejectionism, has to be reformed and its two halves, political and humanitarian, divorced from one another.The Middle East Forum has long pressed for a change in attitude and policy from UNRWA donor countries, especially from the US, its largest donor. We have said in our frequent meetings with the American administration they should apply their own refugee definition to the amount contributed to UNRWA.The US has a definition similar to many other nations, namely that refugee status is not handed down in perpetuity, nor can it be claimed by a person who has a nationality, or a person who lives in their purported country. Millions of Palestinians live in Judea and Samaria and Gaza, which they claim is part of their homeland.If we then remove all the UNRWA recipients who fall under one of these three categories, we have a far more manageable number of around 20,000 to 30,000 actual “Palestine refugees” from Israel’s War of Independence.The rest may require humanitarian assistance, but they should no longer fall under the current UNRWA mandate.If nations around the world still want to provide funds for Palestinian humanitarian needs, then there are plenty of other avenues by which they can do so, but funding should come with strings to help build a better future for the Palestinian people.First, the term “refugee” should stop being used. While this might seem like a semantic issue, it is an important distinction, one that would provide Palestinians with hope for the future, rather than instilling a victim mentality, possibly for generations to come.Second, funds must be provided on condition that Palestinians be integrated into their host countries where possible, or (for those outside of the West Bank and Gaza) be assisted to move to third countries, where appropriate and with the full consent of the individuals involved.Third, it should be ensured that none of the funds provided are being used for terrorist activities, incitement and rejectionism. In fact, these funds should be used to incentivize a culture of peace among Palestinians. Funds should only be provided to schools and authorities where acceptance of Israel, as a Jewish and democratic state, is recognized and taught.These steps will press the Palestinian Authority toward accepting defeat in its war against Jewish self-determination and put an end to the cynical use of the Palestinian people by their leadership and its supporters in the international system to stymie peace and end to the conflict.Most importantly, it will allow for a better future for all the peoples of the region.The writer is director of the Middle East Forum.