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On Wednesday, the Biden administration said it would restore $235 million in aid to Palestinians, upsetting its ally Israel by promising to press for a two-state solution.
Biden said the United States would resume funding for the UN agency for Palestinian refugees that his predecessor severed, breaking from former president Donald Trump's staunchly pro-Israel stance.
Along with $75 million in economic and development assistance for the West Bank and Gaza and $10 million for peacebuilding efforts, the State Department said the United States would give $150 million to the UN agency.
A White House statement confirmed that Biden, in a call with Jordan's King Abdullah II, "affirmed that the United States supports a two-state solution to the Israeli-Palestinian conflict."
Secretary of State Antony Blinken stated that the U.S. assistance to Palestinians "serves important U.S. interests and values" as "a means to advance towards a negotiated two-state solution."
Blinken continued by stating that "it provides critical relief to those in great need, fosters economic development and supports Israeli-Palestinian understanding, security coordination and stability."
Israel, for its part, denounced the assistance to the UN Relief and Works Agency for Palestine Refugees in the Near East, or UNRWA.
"We believe that this U.N. agency for so-called 'refugees' should not exist in its current format," said Gilad Erdan, the Israeli ambassador to the United States.
Erdan said: "I have expressed my disappointment and objection to the decision to renew UNRWA's funding without first ensuring that certain reforms, including stopping the incitement and removing anti-Semitic content from its educational curriculum, are carried out."
The new funding builds on the $15 million earlier announced by the United States in COVID-19 assistance to the Palestinians amid criticism that Israel, which leads in vaccinating its own people, has failed to take similar initiatives in territories under its occupation.
Although UNRWA once relied on the United States as its top donor, the agency has struggled since Trump withdrew funds in 2018 based on the argument that the refugees, some in camps for generations, should be resettled.
The agency said its needs have increased due to COVID-19 and the hardships faced by Palestinians living in Syria, Lebanon, and Jordan.
UNRWA reports that it entered 2021 with liabilities of $75 million from the last fiscal year and that its deficit was expected to reach $200 million in the current year.
Simultaneously, the Biden administration has been gradually restoring relations and support for the Palestinians, including announcing that it would restore the Palestine Liberation Organization's liaison office in Washington that Trump shut down.