The broad push to cut all funding to Palestinian civilians is promoted by Jared Kushner, the son-in-law of President Trump and the top White House adviser on the Middle East. Mr. Kushner has been working on a peace proposal for the Israelis and Palestinians, and is seeking maximum negotiating leverage over the Palestinians.

He also has criticized the Palestinian Authority and President Mahmoud Abbas for refusing to negotiate after Mr. Trump declared in December that the United States was recognizing Jerusalem as the capital of Israel.

“Nobody is entitled to America’s foreign aid,” Mr. Kushner told The New York Times on Thursday.

In late August, the Trump administration announced it was redirecting $200 million that was set aside last year for bilateral aid to Palestinians in the West Bank and Gaza. Soon afterward, American officials said they were ending funding to a United Nations aid agency for Palestinians and redirecting $25 million intended for hospitals in East Jerusalem, which has a mostly Palestinian population.

Until those moves, the United States was one of the largest national donors of aid to Palestinians.

Before last week, advocates of aid to Palestinians had said they hoped American officials would not bar Palestinians from access to the $10 million in funds from what is known as the Conflict Management and Mitigation Program. The program receives a total of $26 million annually from Congress and was established in 2004 by Mr. Leahy. (The other $16 million is spent elsewhere in the world.)

The change means members of Congress will revisit the annual practice of setting aside $10 million, mostly for Israeli-Palestinian exchange programs, Mr. Rieser said.

“Senator Leahy regards the decision to cut off funding for the West Bank and Gaza as a sign that this White House has failed at diplomacy,” he said. “This is not a partisan view. It’s the view of those who recognize that you don’t advance the cause of peace by cutting off programs that are designed to promote tolerance, understanding and address shared problems.”

The money from the United States is almost a quarter of the annual global funding for peace and reconciliation activities between Israelis and Palestinians, said Joel Braunold, executive director of the Alliance for Middle East Peace, a coalition of nongovernmental organizations that seeks United States support for such activities. The grants are bid out for as much as $1.2 million over three years, and are by far the largest of their kind, he said.