Paris - The United States announced on Thursday it is pulling out of the UN's educational, scientific and cultural agency (Unesco) because of what Washington sees as its anti-Israel bias and a need for "fundamental reform" in the agency. Israeli Prime Minister Benjamin Netanyahu said Israel plans to follow suit.While the Trump administration had been preparing for a likely withdrawal from Unesco for months, the timing of the State Department's statement was unexpected. The Paris-based agency's executive board is in the midst of choosing a new chief - with Qatar's Hamad bin Abdulaziz al-Kawari leading the heated election heading into Friday's final vote.Outgoing Director General Irina Bokova expressed "profound regret" at the US decision and tried to defend Unesco's reputation. The organisation is best known for its World Heritage programme to protect cultural sites and traditions, but also works to improve education for girls, promote understanding of the Holocaust's horrors, and to defend media freedom.Bokova called the US's planned departure a loss for "the United Nations family" and for multilateralism. The US and Unesco matter to each other more than ever now with "the rise of violent extremism and terrorism", she said.The US stopped funding Unesco after it voted to include Palestine as a member state in 2011, but the State Department has maintained a Unesco office and sought to weigh in on policy behind the scenes.The US now owes about $550m in back payments.Observer statusIn a statement, the State Department said the decision will take effect December 31, 2018, and that the US will seek a "permanent observer" status instead. It cited US belief in "the need for fundamental reform in the organisation".Netanyahu said on Thursday that Israel also plans to withdraw from the agency, saying it had become a "theatre of the absurd because instead of preserving history, it distorts it".Israel has been irked by resolutions that diminish its historical connection to the Holy Land and have instead named ancient Jewish sites as Palestinian heritage sites.Praising Trump's decision as "brave and moral", Netanyahu said he has ordered Israeli diplomats to prepare for Israel's withdrawal from the organisation in concert with the Americans.Nikki Haley, US ambassador to the United Nations, called Unesco's July designation of Hebron's Old City and the Tomb of the Patriarchs as Palestinian territory the latest of many "foolish actions" that had made the agency "a chronic embarrassment".