UNITED NATIONS – Secretary-General Kofi Annan has decided not to reappoint the head of the UN relief agency for Palestinians because of a long campaign against him by Israel and the United States, UN officials said on Wednesday.

Peter Hansen, a Dane, has led the UN Relief and Works Agency (UNRWA) since February 1996 and had signaled he was willing to serve a fourth three-year term at its helm.

But the United States, the program’s biggest single donor and one of 10 countries on its advisory board, argued against the reappointment on grounds he had served long enough and the agency needed new blood, the officials said.

The Bush administration made clear it would be hard to keep up the $120 million annual U.S. contribution to the agency if Hansen were reappointed due to unhappiness over him in Congress, the officials said.

"It was clear that he wasn’t renewed because of U.S. and Israeli calls for his head," said one official familiar with the deliberations, speaking on condition of anonymity.

The United States was the only member of the advisory board opposing Hansen’s reappointment, the official said, adding that European Union and Arab nations backed him for a new term.

Some UN sources said Hansen’s departure had been in the works for some time as Israeli unhappiness with him built up over the years.

Israel has repeatedly called for his resignation. Annan told reporters on Monday Hansen was among a number of UN officials who would be leaving their posts.

Hansen was often stopped by the Israeli military from going in and out of Gaza and this was "not doing any good to the agency," said one UN official.

He has often sparred with the Israelis over the agency’s work. The Jewish state accuses UNRWA of turning a blind eye to the use of its vehicles and facilities by militants waging a four-year-old uprising.

Hansen in turn has accused Israel of wanton destruction of Palestinian homes, which Israel denies.

In one dispute in October, Israel said militants had transported a Qassam rocket in an UNRWA ambulance, a charge that proved false after videotape shot by an Israeli drone aircraft showed the object to be a stretcher.

That prompted Hansen to accuse the Israeli government of disseminating "deliberately inciteful, false and malicious propaganda."

In another fight, Israeli UN Ambassador Dan Gillerman complained to Annan after Hansen said his agency did not exclude Hamas militants from working for it.

Hansen told the Canadian Broadcasting Corp., "Hamas as a political organization does not mean that every member is a militant and we do not do political vetting and exclude people from one persuasion as against another."

Gillerman told Israeli television: "This man admits on TV that he is paying wages to Hamas members. This is something that cries out and the UN must investigate.