U.S. Foreign Aid to the Palestinians

Since the establishment of limited Palestinian self-rule in the West Bank and Gaza Strip in the mid-1990s, the U.S. government has committed more than $5 billion in bilateral economic and non-lethal security assistance to the Palestinians, who are among the world's largest per capita recipients of international foreign aid. Successive Administrations have requested aid for the Palestinians in apparent support of (1) promoting the prevention or mitigation of terrorism against Israel; (2) fostering stability, prosperity, and self-governance in the West Bank that may aid Israeli-Palestinian diplomatic prospects; and (3) meeting humanitarian needs. The long-term utility of U.S. aid in encouraging regional stability and Palestinian economic and political self-sufficiency might depend to some extent on progress toward a political solution that addresses Palestinian national aspirations and Israeli security demands. U.S. policy priorities regarding aid to the Palestinians have developed partly as a result of the factional and geographical split between the Fatah-led Palestinian Authority (PA) in the West Bank and Hamas in the Gaza Strip, which took place in June 2007. From FY2008 to the present, annual Economic Support Fund (ESF) assistance to the West Bank and Gaza Strip has averaged around $400 million, with much of this going toward U.S. Agency for International Development (USAID)-administered project assistance (through grants and contracts), and the rest toward budget support for the Palestinian Authority (PA). Annual International Narcotics Control and Law Enforcement (INCLE) non-lethal assistance for PA security forces and the criminal justice sector in the West Bank has averaged around $100 million. In line with Obama Administration requests, baseline funding levels for both ESF (including ESF-Overseas Contingency Operations, or ESF-OCO) and INCLE have declined since FY2013, with FY2017 requested annual assistance amounts of $327.6 million for ESF and $35 million for INCLE. Because of congressional concerns that, among other things, U.S. aid to the Palestinians might be diverted to Palestinian terrorist groups, the aid is subject to a host of vetting and oversight requirements and legislative restrictions. In addition to bilateral aid, the United States is the largest single-state donor to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). A number of issues relating to U.S. aid to the Palestinians have relevance for Congress, including: The general effectiveness of aid and possible impacts of informal congressional holds or potential changes in assistance levels or types within both a regional and an international context. Concerns regarding Israeli-Palestinian violence, the reliability and capacity of U.S.-supported PA security forces, and PA-Israel security coordination. Legislative reductions in aid amounts in connection with official Palestinian payments for individuals implicated in terrorism and/or their families. Whether and how to support a PA government approved by Hamas, such as the government that was installed in June 2014 pursuant to a Fatah-Hamas agreement and was partly changed-apparently without Hamas input-in 2015. Addressing Palestinian initiatives with respect to international fora such as the United Nations and International Criminal Court (ICC). Dealing with the multifaceted security, political, economic, and humanitarian challenges presented by the Gaza Strip.