At the same time, the United States will redirect some of that money to humanitarian projects for the impoverished Palestinian people. Humanitarian assistance will rise by 57 percent to USD 287 million over several years, the official said.
Another USD 13 million will go for new vetting procedures, including a special inspector general, to ensure that even humanitarian aid funneled through the United Nations Relief Agency and approved charities does not end up in Hamas hands, said the official, speaking on condition of anonymity because no public announcement has yet been made by the State Department. That was expected later Friday.
The United States and the European Union consider Hamas a terrorist organization and each bans official dealings with it. Hamas won parliamentary elections in the Palestinian territories in January and it formed a government that took power this month. The United States began a review of its aid package to the Palestinians shortly after the election, and has already eliminated direct aid to the Palestinian Authority.
The United States has long channeled most of its assistance to the Palestinians through indirect means, to humanitarian efforts such as food, maternal and child health programs and education and also for projects that only indirectly benefited the Palestinian government. These include such projects as roads, water works and training programs for judges, electoral workers and others.
State Department to consult with Congress on next move
The United States will redirect about USD100 million from canceled projects to humanitarian assistance, the official said. Some of the remaining pot of approximately USD 140 million will be eaten up in the process of ending or disengaging from those projects, but it is not clear where all the money will go.
The official said the State Department will consult with Congress on the next move. Congress has already approved all the spending under review, and has not yet considered how to apportion new money now that Hamas is in place.
The West has been threatening to cut nearly USD 1 billion in annual aid to the Palestinians since the election, which turned out the moderate Fatah Party that Washington had hoped could gradually move toward peace with Israel. Hamas has refused to renounce violence or recognize Israel's right to exist.
Without money from the Arab world, Europe and the United States, a Hamas-led government would be nearly broke.
U.S. President George W. Bush and Secretary of State Condoleezza Rice have said Washington would not give aid to a Hamas-led government unless it changed what they call extremist policies.
Also Friday, the European Union's executive office cut off direct aid payments to the Hamas-led Palestinian government.