U.S. Foreign Aid to the Palestinians

Congressional Research Service - July 16, 2009 - Back to Resources Page [1]

In March 2009, the Obama Administration pledged $900 million in U.S. assistance to the Palestinians to address both post-conflict humanitarian needs in Gaza and reform, security, and development priorities in the West Bank. The enactment of the Supplemental Appropriations Act, 2009 (P.L. 111-32) on June 24, 2009 appropriated over $800 million toward the amount pledged in March, putting total U.S. appropriations since January 2009 well past the amount pledged. P.L. 111-32 also included a provision that applies different conditions than those applied by previous FY2008 and FY2009 appropriations legislation to possible U.S. assistance to a Palestinian powersharing government that includes Hamas. Congress is currently considering FY2010 appropriations legislation (H.R. 3081 and S. 1434) that would provide an additional $500 million in bilateral assistance to the Palestinians.

Since the signing of the Oslo Accord in 1993 and the establishment of limited Palestinian selfrule in the West Bank and Gaza Strip in 1994, the U.S. government has committed approximately $3 billion in bilateral assistance to the Palestinians. Since the death of Yasser Arafat in November 2004, U.S. assistance to the Palestinians has been averaging about $360 million a year. During the 1990s, U.S. foreign aid to the Palestinians averaged approximately $75 million per year. Despite more robust levels of assistance this decade, Israeli-Palestinian conflict and Hamas’s heightened role in Palestinian politics have made it more difficult to implement effective and lasting aid projects that serve U.S. interests.

U.S. aid to the Palestinians has fluctuated considerably over the past three years, largely due to Hamas’s changing role within the Palestinian Authority (PA). 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-à-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, $960 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, facilities, and strategic planning 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.

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Congressional Research Service - July 16, 2009 - Back to Resources Page [1]