Israel’s decision to pay $10 million in damages for the United Nations Relief and Works Agency (UNRWA) buildings damaged in Operation Cast Lead has raised more than a few eyebrows. Is this an admission that Israel was at fault? Is it a precedent for further compensation? Or is it a one-off diplomatic act meant to quiet UN criticism of Israel?

To understand what is at stake, a few words about UNRWA are in order.

UNRWA was established in 1949 to help Palestinian refugees from 1948. While the world’s refugees are handled by the UN High Commission on Refugees (UNHCR), only the Palestinian refugees have their own UN agency. And UNRWA plays by a different set of rules.

While the main goal of UNHCR is to immediately find solutions to the refugees’ plight through repatriation or absorption into their host countries, UNRWA has accepted the demands of the Palestinian political leaders that these refugees remain in their camps so long as they are not allowed to return to pre-1967 Israel (that is, until the political aim of destroying Israel as a Jewish state is accomplished).

Moreover, while UNHCR only considers refugees to be those who were personally dislocated from their homes, UNRWA accepts a multi-generational definition, fostering the creation of the world’s first refugee nation.

This nation has a narrative of dislocation, of hatred against Israel, and of a single political goal: the return to their ancestral homes in present-day Israel and the undoing of 1948. All of this is supported by UNRWA, whose enormous staff of 20,000 is made up almost entirely of Palestinians.

In everything but name, then, UNRWA is a part of the Palestinian struggle against Israel. So what is one to make of the fact that its buildings in Gaza suffered damage during the war?

According to the IDF inquiry, both the HQ and the UNRWA school that were damaged were turned into battle zones by the Palestinians. At the HQ, the IDF held their fire until an IDF bulldozer took a hit from an anti-tank missile, and the building was damaged in the ensuing exchange. At the school, Hamas rocket launchers were operating within 80 metres of the school grounds — a distance calculated to maximise the public relations benefit of any Israeli response.

By any reasonable standard, it is the Hamas government in Gaza who should pay for the damage. They chose to fire from within civilian centres, using Palestinians and the UN as human shields.

Yet despite all this, the buildings are part of the UN. Symbolically, that flag means something — even to Israelis. In this sense, Israel may be wise, if not morally obliged, to cover some of the damage. Ten million dollars is chump change. The real question is: What is the UN actually doing in Gaza?

David Hazony is a Jerusalem-based writer