U.S. Foreign Aid to the Palestinians

After Hamas led the PA government for over a year, its forcible takeover of the Gaza Strip in June 2007 led to the creation of a non- Hamas government in the West Bank resulting in different models of governance for the two Palestinian territories. Since then, the U.S. has dramatically boosted aid levels to bolster the PA in the West Bank and President Mahmoud Abbas vis-a-vis Hamas. Because of congressional concerns that, among other things, U.S. funds might be diverted to Palestinian terrorist groups, much of this aid is subject to a host of vetting and oversight requirements and legislative restrictions. For FY2009, 275 million in bilateral assistance which includes projects funded through the U.S. Agency for International Development direct budgetary assistance to the PA and training, non-lethal equipment, and facilities for PA civil security forces have already been appropriated for the Palestinians, and the State Department has already contributed 98.5 million to the U.N. Relief and Works Agency for Palestine Refugees in the Near East UNRWA. Some of these funds have gone toward emergency humanitarian needs in Gaza created by the 2008-2009 Israel-Hamas conflict. Experts advise that PA stability appears to hinge on improved security, economic development, Israeli cooperation, and the continuation of high levels of foreign assistance. The possibility of a consensus or unity government to address the problem of divided rule among Palestinians could lead to a full or partial U.S. aid cutoff if Hamas is included in the government and does not change its stance toward Israel. Even if the immediate objectives of U.S. assistance programs for the Palestinians are met, lack of progress toward a politically legitimate and peaceful two-state solution could undermine the utility of U.S. aid in helping the Palestinians become more cohesive, stable, and self-reliant over the long term.