Since then, Hamas has been running Gaza as a territory reduced to basically two industries: aid and terrorism. Pivotal to this arrangement is one of the UN's oldest and most oddly configured agencies: the UN Relief and Works Agency for Palestine Refugees in the Near East, or UNRWA. Set up in 1949 with a temporary, three-year mandate to provide aid and jobs for Palestinian refugees, UNRWA has survived for almost 60 years, expanding its scope, budget and influence by extending refugee status to descendants of its beneficiaries.

Normal refugee aid tends to focus on finding ways to resettle displaced people and integrate them back into normal, productive lives. UNRWA, by contrast, provides the main framework for ensuring that the official population of Palestinian refugees remains a swelling source of misery and mayhem--both for their neighbors and for the Palestinians themselves.From an original refugee population listed by UNRWA as some 900,000 in 1950, UNRWA now provides for a Palestinian "refugee" clientele of more than 4.6 million.

They are spread throughout camps--which physically look more like squalid towns--in Syria, Jordan, Lebanon, the West Bank and Gaza. Into this system flows an annual UNRWA budget now well above $400 million per year, doled out variously in the form of cash, goods, medical care, schooling, job-training programs and so forth.

To handle these operations, UNRWA employs more than 24,000 staffers. That's more than any other UN agency, including the UN High Commissioner for Refugees, or UNHCR, which with some 6,300 staffers--about one-quarter the manpower of UNRWA--is responsible for all other refugees worldwide, totaling more than 11 million.

At UNRWA, more than 99% of the staff are local Palestinians. They sit at the many local levers of the UNRWA distribution machinery, which under UNRWA policy takes on the coloration of and yields to the policies of host governments--as UNRWA officials explained to U.S. lawmakers who some years ago challenged the use of anti-Israeli textbooks in UNRWA schools.

In today's terrorist-run Gaza, such an approach carries exactly the kind of deadly implications now playing out--while UNRWA and other UN officials call for an end to the violence. Originally headquartered in Beirut, UNRWA moved its main offices to Vienna after the Lebanese Civil War, then moved again in 1996 to its current headquarters in Gaza. There, it serves as a core fundraiser and rallying point for donations from around the globe, many from sovereign states.

While not all charity to Gaza flows through UNRWA, it is UNRWA that enjoys pride of place, with its UN stamp of legitimacy and direct, easy access to the UN's world stage. Since late December, when Israel began its campaign to end the thousands of rocket and mortar attacks launched by Hamas from Gaza, UNRWA officials have given a parade of briefings via UN headquarters in New York.

Teleconferencing in, they have ignored what UNRWA Commissioner General Karen Koning Abuzayd has described as their "nonpolitical" mandate. With Abuzayd in the lead, they have detailed their outrage on behalf of the Palestinians, excoriated Israel and stepped further into the political arena to demand an immediate ceasefire--something these same UNRWA officials did not do when the attacks were one-way out of Gaza into Israel.

Given the structure and location of UNRWA, such bias comes as no big surprise. Headquartered inside a terrorist enclave, sharing with terrorist authorities such basic interests as keeping the local lights on and the water running, UNRWA officials have plenty of incentives to slam Israel as the culprit--not themselves, or their Hamas cohabiters.

And while blaming Israel, UNRWA officials also have plenty of incentive to present the worst possible picture. The greater the perceived distress, the better the prospects not only for immediate relief, but for future fundraising. UNRWA's interests in Gaza are by now so entwined and, in many ways, so aligned with Hamas' interests that it is often hard to tell them apart.

And, as UNRWA officials have aired their views and demands from the UN stage, handouts for Gaza have been rolling in from all sides--some via UNRWA, some through other channels. This goes way beyond Israel allowing hundreds of aid trucks into Gaza, even as the Israeli military is battling to shut down the rocket launchers and destroy the arms-smuggling tunnels and weapons caches of Hamas.

Support in cash and kind, in dollars and tons, has been pledged by donors ranging from Iran to Japan to the European Union to the Arab Gulf States to the U.S. (already the top donor to UNRWA, with $148 million in contributions last year, and now promising an immediate $5 million in response to UNRWA's latest flash appeal for Gaza, plus another $80 million for the agency to spread around in places including Gaza). Plane-loads of relief, both in goods and services, have been announced by donors ranging from Russia to Libya to Sudan.

When this largesse eventually arrives in Gaza, how exactly will it be spent, distributed and supervised? UNRWA and the surrounding constellations of aid operations in Gaza are by and large areas of deep murk. In a 2006 U.S. congressional briefing, Abuzayd said it was too difficult for UNRWA to run checks against terrorist watch lists because "Arab last names sound so familiar."

This was a strange comment coming from Abuzayd, a woman who is married to a Sudanese professor, holds a degree in Islamic studies and has worked for UNRWA in Gaza since 2000, first as deputy commissioner of UNRWA and since 2005 as the top boss. These days, UNRWA officially runs periodic reviews that are supposed to winnow out terror connections. But donors must by and large rely on UNRWA's word that this is a serious process.

The history of terror out of Gaza in recent years suggests that, at best, a lot falls between the cracks. In response to e-mailed queries this week, a UNRWA spokesman said the agency now runs periodic name checks for relief recipients against a UN watch list named for counter-terrorism resolution number 1267 and has found no matches. That's no big surprise; the 1267 watch list is for major players among al-Qaeda and the Taliban, not Iranian-backed Hamas.

For years, various U.S. lawmakers, including the late Congressman Tom Lantos, have tried introducing bills asking for genuine transparency and accountability from UNRWA--which has never been subject to a genuinely independent external audit.

Such efforts have gained no traction, opposed by a UN that even under the most benign circumstances is hostile to opening its books, plus a U.S. State Department that prefers to close its eyes and shovel millions of U.S. taxpayer dollars into terrorist-controlled infrastructure.

This past September, Democratic Rep. Steve Rothman, with a bipartisan group of five co-sponsors, submitted a concurrent resolution noting that "UNRWA has employed staffers affiliated with terrorism."

The resolution cited specific examples of UNRWA ambulance and schools having been used to abet terrorism and mentioned a number of figures, including Awad al-Qiq, headmaster of an UNRWA school in Gaza, "who also led Islamic Jihad's engineering unit that built bombs and Qassam rockets."

However humane the intent of UNRWA officials, they have become de facto enablers of Hamas' terrorist fiefdom in Gaza.

In pushing for an ever-bigger dole and in using the UN stage as a megaphone to help elicit sympathy, drum up funds, denounce Israel and drape in UN baby blue the interests and demands of the Iranian-backed terrorists of Hamas, they do a terrible disservice not only to the cause of world peace, but to the prospects of the Palestinians themselves for forsaking terror and building better lives.

Claudia Rosett, a journalist-in-residence with the Foundation for Defense of Democracies, writes a weekly column on foreign affairs for Forbes.com. Forbes