The US on Friday cut more than $200 million in aid to Palestine following a review initiated by President Donald Trump.
A senior State Department official confirmed the move, saying that the funds originally intended for the West Bank and Gaza will instead by used for "high-priority projects elsewhere."
"At the direction of President Trump, we have undertaken a review of US assistance to the Palestinian Authority and in the West Bank and Gaza to ensure these funds are spent in accordance with U.S. national interests and provide value to the US taxpayer," the official said in a statement.
"As a result of that review, at the direction of the President, we will redirect more than $200 million in FY2017 Economic Support Funds originally planned for programs in the West Bank and Gaza," the official added, referring to the 2017 fiscal year.
The brief three-paragraph statement did not say exactly how much funding would be cut, only giving a ballpark estimate of more than $200 million.
Trump has sparked a global anger over his decision to unilaterally recognize Jerusalem as Israel's capital last December. The move undercut long-standing underpinnings of Israeli-Palestinian peace talks where the city's status was to be determined as a final-status issue.
The Palestinians have snubbed calls from the Trump administration to return to the negotiating table, arguing Washington gave up its status as a neutral mediator by making the declaration.
Trump and his team are preparing a rollout of their long-mulled peace plan to end the decades-long conflict.