US Secretary of State John Kerry says the United States will provide an additional $75 million (£46 million) in aid to create Palestinian jobs and help them improve roads, schools and other infrastructure.
US officials say the aid is designed to boost Palestinian public support for faltering peace talks with Israel by showing them tangible benefits from the process.
Kerry announced the aid in Bethlehem, where he is meeting Palestinian leader Mahmoud Abbas. Kerry earlier met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem.
The new aid brings the US contribution to a Palestinian infrastructure programme to $100 million (£62 million).