Secretary of State Rex Tillerson told lawmakers on Tuesday that the Palestinian Authority assured him the Palestinian Liberation Organization is in the process of changing controversial policies that pay terrorists and their families.

Though Israeli and Palestinian leaders are now disputing the account, Tillerson made the comments in a hearing before the Senate Foreign Relations Committee. He told senators that on his most recent trip to Bethlehem, the PA said the PLO would be revising their long-standing policy.

“They have changed their policy, at least, I have been informed they’ve changed that policy, and ... their intent is to cease the payments to the family members of those who have committed murder or violence against others,” Tillerson said. “So, it is—we’ve been very clear with them that this is simply not acceptable to us.”

Tillerson told lawmakers that Palestinian leaders argued they must take care of widows and orphans, but that he told them the American people could not see any explanation for payments to terrorists, which they refer to as a ‘martyr fund.’

“It is certainly not acceptable to the American people,” Tillerson said.

Tillerson told lawmakers both he and President Trump raised the issue during their visit to the West Bank last month.

But both Israeli and Palestinian leaders are disputing Tillerson’s claim, saying there has been no change to policy.

Israel has pushed for the Palestinians to halt the “martyr’s fund” payments that go to roughly 35,000 families of Palestinians killed and wounded in its long-running conflict with Israel, including suicide bombers and others.

Palestinian Minister of Prisoner Affairs Issa Karake said the payments must continue, calling them a “national, social and humanitarian duty.”

“Those people, (prisoners) have sacrificed their lives for their people and the minimum we can do to them is taking care of their families,” Karake said.

Defense Minister Avigdor Lieberman said he’d seen no signs the Palestinian Authority had changed their policy.

“We follow this closely,” Lieberman said on Israel’s Public Radio on Wednesday. “As of this moment I have seen no cessation and no intention to stop paying the terrorists’ families.”

But a State Department official told Fox News that the PA, PLO and President Abbas are looking at ways to “address this issue.”

“We were pleased to see last month that some payments were stopped to Hamas-affiliated prisoners, and we will continue to have this dialogue with the Palestinians,” a State Department official told Fox News. “We want to see further steps taken on this issue.”

The “martyr’s fund” was set up in 1967 by the PLO, the group that formally represents all Palestinians. The fund for families of several thousand Palestinians held for alleged anti-Israeli activities, from stone-throwing to shooting attacks and bombings, had a 2016 budget of $125 million, according to the website of the Palestinian Authority’s Finance Ministry.

Israel continuously argues that their payments promote violence.

“As the Secretary has said, we cannot tolerate any program that results in financial gain for committing acts of violence,” a State Department official told Fox News.

Fox News’ Rich Edson and The Associated Press contributed to this report.