US Congress leaders will contribute $150 million towards Palestinians in the West Bank, Gaza and East Jerusalem two years after the Trump administration cut all assistance, Israeli newspaper Haaretz reported.
The funding which will be part of next year's aid to Palestine was agreed by both Democratic and Republican leaders in Congress.
The budget deal includes $75 million in assistance for the Palestinian Authority's security forces, and another $75 million to support civilian and humanitarian programmes and institutions that lost funding in 2018 as a result of the administration's cuts, including hospitals in East Jerusalem.
The US was previously one of the largest donors to the Palestinians and the PA, providing upward of half-a-billion dollars a year through the UN Relief and Works Agency (UNRWA), which provides education, shelter and basic essential support to millions of Palestinian refugees, but has withdrawn its funding, a move encouraged by Israeli Prime Minister Benjamin Netanyahu.
Infrastructure projects, including water treatment facilities in the Gaza Strip, have also been put on hold.
The announcement came at a time when the Palestinian leadership has angered the White House by boycotting its peace efforts in June this year as a result of US President Donald Trump's recognition of Jerusalem as Israel's capital and decision to move the American embassy there, reversing decades of US policy.
The $150 million in aid to the Palestinians includes "several pages of caveats", such as money not go to the Palestinian Authority in Gaza or to any institution "named for a terrorist", according to the Times of Israel.
This came after US Congress rejected an official request from the White House for $175 million, aimed at supporting Trump's peace initiative for the Middle East dubbed the "deal of the century".
The requested money was part of the US 2020 budget, according to Haaretz, which added that the rejection was not motivated by politics, but rather by budgetary considerations.