The West Bank’s Palestinian Authority (PA) has set up a committee to come up with worst-case scenario financial strategies that may unfold for Palestinians now that US President Donald Trump, who is sympathetic to Israeli interests, has entered office.
While one of former President Barack Obama’s last actions before leaving the post was releasing $221 million (£179 million) in aid to the PA, new White House Press Secretary Sean Spicer has suggested that Mr Trump could renege on the commitment.
On the campaign trail Mr Trump was vociferous in his support for right-wing Israeli positions such as unpicking the 2015 Iran nuclear deal, settlement building in the West Bank, and moving the US embassy to the contested city of Jerusalem.
While Mr Trump’s administration has used more cautious language since he was inaugurated on January 20, Israel has still welcomed him as a “friend in the White House,” a significant shift after eight years of worsening relations with predecessor Barack Obama.
Palestinians widely view the bold new Israeli announcement of the building of thousands of new settlement homes in the West Bank as a direct result of “encouragement” from Mr Trump, as the Palestinian Liberation Organisation (PLO) described it.
Many are worried that either the threat or lure of financial aid will be used to make Palestinians negotiate despite the distaste for recent Israeli actions.
“Under Trump, the road ahead will be full of challenges, as US aid to the PA will be possibly reduced,” Ghassan al-Khatib, the former Palestinian labour minister and former director of the Government Media Office, told Al-Monitor.
The US has steadily cut the amount of money given directly to the PA Treasury since 2008, channelling more and more into NGOs and development projects instead. On average, US input into the PA’s budget totalled $300 million (£240 million) a year under Mr Obama.
While the majority of the PA’s financial support comes from the EU, rather than the US, the UK government’s strengthened ties with Israel - demonstrated by Israeli Prime Minister Benjamin Netanyahu’s visit to Downing Street this week - and a possible right-wing political shift in the French elections later this year are yet more cause for worry.
“Trump might influence the positions of international parties to halt the financial support given to the PA due to the weak Palestinian impact on the international political scene,” Mr Khatib added.