The United States has announced it will give $5m to the Palestinians to help them fight the coronavirus epidemic, roughly 1% of the amount Washington provided a year before Donald Trump cut almost all aid.

The US ambassador to Israel, David Friedman, a former Trump bankruptcy lawyer, announced the aid package on Twitter, saying he was “very pleased” the US would provide money for Palestinian hospitals and households.

“The USA, as the world’s top humanitarian aid donor, is committed to assisting the Palestinian people, & others worldwide, in this crisis,” he said.

Palestinian authorities and charities say the Trump administration is partly to blame for a deteriorating humanitarian situation that leaves them unprepared to face the Covid-19 pandemic, especially in the blockaded Gaza Strip but also the Israeli-occupied West Bank.

In 2018, Trump gradually cut virtually all US money to Palestinian aid projects after the Palestinian leadership accused him of being biased towards Israel and refused to talk. The US president accused Palestinians of lacking “appreciation or respect”.

That summer, Trump cancelled more than $200m in economic aid. Cuts included $25m earmarked for underfunded East Jerusalem hospitals that are now scrambling to prepare for the Covid-19 crisis.

Trump also cut funding to the UNRWA, a UN body that supports more than 5 million Palestinian refugees, not only in the Palestinian territories but also war-torn Syria and elsewhere in the Middle East.

The US had previously provided roughly $300m a year to the agency – money used for critical projects, including food assistance, schools, healthcare, and social services. The then head of UNRWA, Pierre Krähenbühl, said the funding crisis was “the biggest and most severe in our history”.

Leaked emails alleged that Trump’s son-in-law and adviser Jared Kushner had argued that “ending the assistance outright could strengthen his negotiating hand” to push Palestinians to accept their blueprint for an Israeli-Palestinian deal.

However, the cuts were decried as catastrophic for Palestinians’ ability to provide basic healthcare, schooling and sanitation, including by prominent Israeli establishment figures.

A former spokesman for the Israeli military, Peter Lerner, warned in an article for the Israeli newspaper Haaretz that “Trump’s quid pro quo” business mentality was wrongly absent of “human and humanitarian needs”.

The occupied Palestinian territories have confirmed more than 300 cases of Covid-19, with Israel – as well as Egypt in Gaza’s case – restricting who can enter or leave, going some way to stalling the spread of infections. However, impoverished Gaza, with its largely collapsed healthcare system, has been highlighted as a potentially disastrous place to have a coronavirus outbreak.

In January, standing next to Israel’s hardline prime minister, Benjamin Netanyahu, Trump revealed his “vision for peace”, which had been pre-emptively rejected by Palestinian leaders.

The 181-page plan gave Israel a wishlist of its long-held demands, including full military control over Palestinians, much of their land and all of Jerusalem and Israeli settlements. Palestinians were promised the possibility of a disjointed and demilitarised “state”.