Officials say the Obama administration in its waning hours defied Republican opposition and quietly released $221 million to the Palestinian Authority.
GOP Congress members have been holding up the money.
A State Department official and several congressional aides said the outgoing administration formally notified Congress it would spend the money Friday morning, just before Donald Trump became president.
More than $227 million in foreign affairs funding was released at the time, including $4 million for climate change programs and $1.25 million for UN organizations.
At least two GOP lawmakers had placed holds on the Palestinian funds. Congressional holds are generally respected by the executive branch but are not legally binding.