Why American Aid to Palestine May Get Cut Off

Why American Aid to Palestine May Get Cut Off

By Emily Cadei

A Palestinian boy looks out through the window of his house to a march calling for an end to Palestinian divisions as he waits to see delegation of The Palestine Liberation Organization (PLO) at Shati refugee camp in Gaza City April 22, 2014.
SourceAhmed Deeb/NurPhoto/Corbis


America could cut off aid to Palestine, now that Hamas is in the government seat. Whether that would help achieve American goals is another question altogether.

By Emily Cadei

When Palestinian Authority President Mahmoud Abbas swore in a new Palestinian unity government including Hamas Islamists on Monday, it sounded a death knell for lofty talk of peace in the Middle East coming out of Jerusalem, Ramallah and Washington D.C. over the last nine months.

It could also signal something more prosaic: a halt to the flow of American cash that goes to the Palestinian territories, which averages more than a half a billion dollars a year.

The United States budgeted $440 million in aid to the Palestinian Authority for 2014, according to the Congressional Research Service, the majority of which goes to help keep the Palestinian economy in the West Bank afloat. The Palestinian territories are largely dependent on foreign funding — from the United States, the European Union and the Arab World — to help pay for government salaries, economic development and security and humanitarian needs.

Strengthening the moderate Fatah-run government and West Bank economy and security will improve the chances for peace with Israel.

Instability, on the other hand, raises the risk of conflict. Even with the aid, the latest bid to negotiate peace, willed forward by Secretary of State John Kerry, collapsed this spring

The United States is also the largest single state funder of the United Nations Relief and Works Agency for Palestine Refugees, averaging $200 million in donations to the program, which helps Palestinians in the West Bank and Gaza and those living in neighboring countries.

Group of men lined up formally

Palestinian Prime minister Rami Al-Hamdallah (R) takes oath before President Mahmoud Abbas in 2014. 

Source Fadi Arouri/Xinhua/Corbis

U.S. assistance could now be in jeopardy. The new government in Ramallah results from a power sharing agreement between the rival Palestinian parties Fatah, which runs the West Bank, and Hamas, which controls Gaza, and is considered a terrorist organization by most in the West.

Over the years, the U.S. Congress has passed restrictions on the money that goes to Palestinians — including a measure that bars funding for any power-sharing government that includes Hamas as a member.


For now, the Obama administration plans to continue distributing aid. Secretary Kerry said on Wednesday that new government is “technocratic” and “does not include any ministers who are affiliated with Hamas,” even though Hamas has agreed to cooperate with the new leadership. President Abbas, he added, has said it will remain “committed to the principles of nonviolence, negotiations, recognizing the state of Israel … and that they will continue their previously agreed upon security cooperation with Israel.” 

But, Kerry added, “We will measure the composition, we will measure the policies of the new technocratic government, and we will calibrate our approach accordingly.”

The new government’s sparked anger from Israel as well as members of Congress, including some who have the power to hold up money. Said one such lawmaker, Republican Rep. Kay Granger of Texas: “Funding for the Palestinians is off-the-table until it is clear that the unity government is committed to peace and security.”

For the residents of the West Bank and Gaza who rely on that funding, those are ominous words.