"UNRWA has no political role, but it does have the moral role of reminding all parties involved and all governments with a say in the peace process that there will be no peace without a fair solution for refugees in line with UN resolutions," the agency's Commissionner General Filippo Grandi told AFP.
"It is tragic that the international community has not yet found a solution to this problem," Grandi, who was appointed to the post in January, said on a visit to Beirut.
The fate of refugees is one of the thorniest issues in the stalled Middle East peace process, as Israel rejects Palestinian demands to allow their return to lands they fled in 1948 when the state of Israel was created.
The cash-strapped UNRWA provides assistance to about 4.7 million Palestinian refugees, many of whom have settled in camps in Jordan, Syria and Lebanon.
"The situation has been the same for 60 years now, and today we speak of fourth-generation refugees," said Grandi. "Without a solution, this will only continue."
UNRWA remains 100 million dollars short of its budget for 2010, Grandi said earlier this month.
Part of the agency's budget in Lebanon goes to the reconstruction of Tripoli levelled in deadly fighting between the army and Al-Qaeda-inspired group in 2007., a camp near the northern port city of
The fighting killed 400 people, including 168 Lebanese soldiers, and displaced about 30,000 residents from the, where Fatah al-Islam was based.
UNRWA has made an appeal for 450 million dollars to rebuild the camp and the surrounding areas but has so far received only 120 million dollars.
"The money we have right now covers the reconstruction of only three of eight camp sections destroyed," Grandi said.
"We also need relief funds for the basic needs of the camp residents urgently. What we have now will run dry by May or June."
On the political and economic fronts, the Lebanese constitution bans Palestinian refugees from obtaining Lebanese citizenship, owning property or entering some professions.
Grandi said he has urgedto find "a concrete solution for the legal employment of refugees in Lebanon."
According to UNRWA figures, Lebanon is home to nearly 400,000 refugees, most of whom live in 12 destitute camps across the country.
Other figures put the number at between 250,000 and 270,000 as the UN does not strike off its list those who emigrate from Lebanon, which has a population of four million.
Lebanon, which supports the refugees' right to return to their homes, absorbs 12 to 15 percent of the cash-strapped agency's total annual budget, which tops 600 million dollars (442 million euros).
Lebanese across the board reject the permanent settlement or full integration of the mainly Sunni Muslim Palestinians, as their naturalisation would upset the country's delicate confessional balance.