In response to the US decision to cut more than $200 million in aid money to the Palestinians, the Palestinian President, Mahmoud Abbas' spokesman says the US decision is meant to force the Palestinians to abandon their claim to Jerusalem.

According to Nabil Abu Rdeneh, the move is part of continuing political and financial pressure on the Palestinian leadership. He says the Americans must be fully aware that there will be no peace without east Jerusalem as capital of a Palestinian state.

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"The American administration is using cheap blackmail as a political tool. The US administration should be ashamed of constant bullying and punishment of a people under occupation. The US has already demonstrated its depravity in its collusion with the Israeli occupation, allowing Israel to steal land and resources, and now it is displaying economic viciousness by punishing the Palestinian victims of the occupation," Hanan Daoud Khalil Ashrawi, a PLO Executive Committee member, said on Saturday.

Palestinian President Mahmoud Abbas and US President Donald Trump (Photo: Reuter, AP)

On Friday, The US administration has decided to cut more than $200 million in bilateral aid to the Palestinians, following a review of the funding for projects in the West Bank and Gaza.

The department notified US Congress of the decision in a brief, three-paragraph notice sent first to lawmakers and then to reporters. It said the administration will redirect the money to "high priority projects elsewhere."

The move comes as President Donald Trump and his Middle East point men, Jared Kushner and Jason Greenblatt, staff up their office to prepare for the rollout of a much-vaunted but as yet unclear peace plan for Israel and the Palestinians.

"At the direction of President Trump, we have undertaken a review of US assistance to the Palestinian Authority and in the West Bank and Gaza to ensure these funds are spent in accordance with US national interests and provide value to the US taxpayer. As a result of that review, at the direction of the president, we will redirect more than $200 million ... originally planned for programs in the West Bank and Gaza," the US statement read.

"This decision takes into account the challenges the international community faces in providing assistance in Gaza, where Hamas control endangers the lives of Gaza's citizens and degrades an already dire humanitarian and economic situation," the announcement read, without providing additional details.

Hanan Ashrawi (Photo: Eli Mendelbaum)

The US notice did not give an exact amount of the funds to be cut, but said they had been approved in 2017.

The US had planned to give the Palestinians $251 million for good governance, health, education and funding for civil society in the current 2018 budget year that ends on Sept.30. But with just over a month to go before that money must be used, reprogrammed to other areas or returned to Treasury, less than half has actually been spent. Earlier this month, the department had released about $60 million of the 2018 money for security projects that encourage cooperation between the Palestinian Authority and Israel.

The announcement does not include some $65 million in frozen US funding for the UN Relief and Works Agency, which provides services to Palestinians in the West Bank, Gaza, Jordan and Lebanon. However, the Trump administration is extremely skeptical of UNRWA and that money is also likely to be reprogrammed, according to officials.

Friday's decision follows a similar decision last week in which the State Department announced that it was redirecting $230 million dollars in aid that had been planned for stabilization programs in liberated areas of Syria.

In that case, however, the department said the loss of US funding would be more than offset by other nations, including Saudi Arabia, which announced a $150 million contribution for Syria stabilization just hours before the American announcement.