The U.S. will cut more than $200 million in economic aid for Palestinians and direct the money toward other projects, the State Department announced on Friday.

In a statement, a senior State Department official said the administration is redirecting funds "originally planned for programs in the West Bank and Gaza" toward "high-priority projects elsewhere."

The official said the decision was made "at the direction of President Trump Donald John TrumpSteele Dossier sub-source was subject of FBI counterintelligence probe Pelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' Trump 'no longer angry' at Romney because of Supreme Court stance MORE" to ensure aid money is spent "in accordance with U.S. national interests and [will] provide value to the U.S. taxpayer."

ADVERTISEMENT

The move comes as Trump and his team, including senior adviser Jared Kushner Jared Corey KushnerAbraham Accords: New hope for peace in Middle East Tenants in Kushner building file lawsuit alleging dangerous living conditions Trump hosts Israel, UAE, Bahrain for historic signing MORE, are working toward releasing their long-awaited plan for peace between the Israelis and Palestinians.

Cutting aid could inflame tensions with the Palestinians, who have accused the Trump administration of giving more favorable treatment to the Israelis in their engagement in the region.

The State Department said the funding 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 U.S. had previously frozen aid payments to the Palestinians for humanitarian programs in part due to concerns about terrorist activity.