The United Nations Palestinian refugee agency needs more than $200 million to fund projects until the end of the year, with extra pledges so far unable to minimize a massive slash in donations from the United States.
"Schools may not be able to open on time in August," Miroslav Lajcak, the president of the General Assembly, told a pledging conference for the UN Relief and Works Agency for Palestinian refugees in New York on Monday, the second such donors' meeting in three months.
"Other services could start to be affected as early as next month. And humanitarian activities in the West Bank and Gaza are at risk."
UNRWA was thrown into severe financial crisis when the United States earlier this year cut $250 million from its budget.
Previous pledging conferences saw UNRWA so far meet around half its target of $446 million for the year.
"Failure to provide desperately needed resources comes with a price. More hardship for communities. More desperation for the region. More instability for our world," said UN Secretary-General Antonio Guterres.
"We must do everything possible to ensure that food continues to arrive, that schools remain open and that people do not lose hope."
US Ambassador Nikki Haley has said Washington will not restore the aid until the Palestinians agree "to come back to the negotiation table" with Israel.
"Thanks to $200 million in new funding, UNRWA has been able to maintain its vital services. At the same time, UNRWA has taken extraordinary measures to reduce its expenditures by an additional $92 million," said Guterres.
On Monday, several countries announced new assistance, including $500,000 from Mexico and four million euros from Belgium.
Set up in 1949, UNRWA provides schools and health clinics to 5.3 million refugees in the Palestinian territories, Jordan, Lebanon and Syria.
More than 500,000 children study at UNRWA schools -- 54 percent of the agency's budget goes to education. UNRWA also provides medical assistance and welfare.
The agency employs more than 20,000 people in the Middle East, most of them Palestinians.