Thousands of workers with the UN agency for Palestinian refugees have launched an open-ended strike in Jordan on Sunday.

UNRWA spokesman Amjad Obeid said the agency's more than 6,000 workers began the strike, paralyzing its schools, health care and garbage-collection services in refugee camps.

Classes were canceled for some 120,000 students, Obeid stressed.

The UN Relief and Works Agency, known as UNRWA, is dealing with a budget crunch after an unprecedented loss of all funding from the US, its largest donor, the Associated Press reported.

According to Obeid, workers are demanding raises of about $140 a month. He said the Jordanian government is trying to broker a settlement.

The strike did not appear to affect the cash-strapped agency's operations in the Palestinian territories or elsewhere in the region.