"In calendar year 2018, the Trump Administration has significantly cut funding for the Palestinians during a time of tension in U.S. - Palestinian relations. One of the Administration's apparent reasons for the funding cuts is to express displeasure at the Palestine Liberation Organization's (PLO) cutoff of diplomatic contacts with the United States after President Trump's December 2017 recognition of Jerusalem as Israel's capital. PLO Chairman and Palestinian Authority (PA) President Mahmoud Abbas and other PLO/PA officials have insisted that aid cuts will not compel them to resume those contacts.Until this year, the U.S. government had consistently supported economic assistance to the Palestinians and humanitarian contributions to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), even if funding in some cases was reduced or delayed. Bilateral assistance to the Palestinians since 1994 has totaled more than $5 billion, and has been a key part of U.S. policy to encourage an Israeli-Palestinian peace process, improve life for West Bank and Gaza residents, and (since 2007) strengthen the West Bank-based PA vis-à-vis Hamas in Gaza. U.S. contributions to UNRWA through global humanitarian accounts since 1950 have totaled more than $6 billion."
CRS Report for Congress, RS22967
Congressional Research Service: https://crsreports.congress.gov/