The aid cut is the result of a review of US assistance to the Palestinian Authority " to ensure these funds are spent in accordance with US national interests and provide value to the US taxpayer," said a State Department spokesman.
"As a result of that review," the statement continued, "at the direction of the president, we will redirect more than $200 million in [fiscal year 2017] economic support funds originally planned for programs in the West Bank and Gaza. Those funds will now address high-priority projects elsewhere."
The administration is blaming continued Hamas control over the coastal Gaza Strip for its decision. The terrorist organization's grip on power there, the State Department said, creates "challenges" for the international community seeking to provide aid.
US President Donald Trump's Middle East peace team– led by Jared Kushner, his son-in-law, and Jason Greenblatt, his special envoy to the conflict– has prioritized the delivery of humanitarian aid to Gaza, hosting an international conference on the matter at the White House in March, and believes the key to success in any future peace negotiation between Israelis and Palestinians is the end to Hamas control there.
The administration has cut aid to several UN bodies devoted to the Palestinian cause, including United Nations Relief and Works Agency (UNRWA) and the Human Rights Council.
The PA cut off communications with the White House after Trump recognized Jerusalem as Israel's capital last December, relocating the US embassy there.
In a statement, the PLO’s envoy to Washington said that Trump was “weaponizing” humanitarian aid and was irreparably damaging the relationship.
“This administration is dismantling decades of US vision and engagement in Palestine. After Jerusalem and UNRWA, this is another confirmation of abandoning the two state solution and fully embracing Netanyahu’s anti-peace agenda,” said Husam Zomlot.
“Only a recommitment from this administration,” he added, “to the long held US policy of achieving peace through the two state solution on the 1967 borders with east Jerusalem the capital of the state of Palestine and respecting international resolutions and law will provide a way forward.”