Palestinians say $200m US cut in aid amounts to 'cheap blackmail'

US President Donald Trump's administration is resorting to "cheap blackmail" against the Palestinians, revealing its true intentions by cutting more than $200m in aid for the West Bank and Gaza Strip, senior Palestinian officials said on Saturday.

A US State Department official said on Friday that the decision, made "at the direction of the president," came after a review of aid programmes to the Palestinian territories. 

The funding would "now address high-priority projects elsewhere," it added.

Saeb Erekat, secretary-general of the Palestine Liberation Organisation (PLO), said the decision amounts to an "admission of the true intentions behind American aid policy of intervening in the internal affairs of other peoples".

US aid "is not a gift to our people but a duty of the international community to take responsibility for the continuation of Israeli occupation, preventing the development of the Palestinian economy and society," he said.  

By slashing aid to the Palestinians, the US "once again reaffirms its disregard for its international commitments," Erekat added. 

Hanan Ashrawi, a member of the PLO's executive committee, accused the US of using "cheap blackmail as a political tool".

"The Palestinian people and leadership will not be intimidated and will not succumb to coercion. The rights of the Palestinian people are not for sale," she said.

The United States had already made drastic cuts to its contribution to the UN agency for Palestinian refugees, UNRWA, in January.

The announcement comes at a time when the Palestinian leadership has angered the White House by boycotting its peace efforts since President Donald Trump recognised Jerusalem as Israel's capital and moved the US Embassy there, reversing decades of US policy.

Trump's son-in-law and senior adviser, Jared Kushner, is leading an effort to craft a peace plan meant to start talks between Israel and the Palestinians to end their decades-long conflict. A decision on when the initiative may be rolled out has not yet been made.

The State Department cited Hamas's control of Gaza as part of its justification for reallocating the funds. The US and Israel designate Hamas a terrorist group.

The decision is almost certain to exacerbate the dire humanitarian situation in Gaza. More than two million Palestinians are packed into the Gaza Strip, which suffers deep economic hardships.

"This administration is dismantling decades of US vision and engagement in Palestine," Husam Zomlot, head of the Palestinian General Delegation to the United States, said in a statement, referring to Trump's administration.

UNRWA cuts

"After Jerusalem and UNRWA [the United Nations Relief and Works Agency], this is another confirmation of abandoning the two-state solution and fully embracing [Israeli Prime Minister Benjamin] Netanyahu's anti-peace agenda. Weaponizing humanitarian and developmental aid as political blackmail does not work," Zomlot added.

The US in January announced it would withhold $65m of $125m that it had planned to send to UNRWA, which is funded almost entirely by voluntary contributions from UN states, with the United States as the largest contributor.

US National Security Advisor John Bolton told Reuters this week that UNRWA was "a failed mechanism" that violated standard international law on the status of refugees.

UNRWA was founded in 1949 to assist the 700,000 Palestinians who were forced to leave their homes or flee after Israel was founded in 1948 - in what Palestinians refer to as the Nakba (the catastrophe). It helps about five million Palestinian refugees, a figure that includes descendants of those displaced.

In June, the UN said UNRWA needed more than $200m to fund its projects.

"Failure to provide desperately needed resources comes with a price. More hardship for communities. More desperation for the region. More instability for our world," said UN Secretary-General Antonio Guterres.

"We must do everything possible to ensure that food continues to arrive, that schools remain open and that people do not lose hope," he said.