The decision comes after the state department said it would also end funding to the United Nations relief agency for Palestinian refugees.
WASHINGTON — The Trump administration is withdrawing $25 million it had committed to the East Jerusalem Hospital Network after a review found that the funds were not advancing U.S. interests, a State Department official said.
The decision follows an announcement last month that the U.S. would cut more than $200 million in aid to the Palestinians.
It also comes days after the state department said it would end funding to the United Nations relief agency for Palestinian refugees, raising fears that programs already straining to help millions of people will collapse and that unrest could ensue.
The Palestinians had held out hope that the hospital money would be spared because it was not included in the $200 million aid cut. On Saturday, the Palestinian Authority denounced the administration's move as "an act of political blackmail."
The review of U.S. assistance to the Palestinian Authority and to the West Bank and Gaza Strip found that the funds were not advancing U.S. interests or providing value to American taxpayers, the State Department official said, referring to the most recent cuts.
The official said the $25 million would be "redirected" to other projects but did not give specifics.
In response, Palestinian Liberation Organization executive committee member Dr Hanan Ashrawi said that by cutting funds to hospitals in East Jerusalem the United States was threatening to cause "serious instability and grave harm to thousands of Palestinian patients and their families."
"Such an act of political blackmail goes against the norms of human decency and morality. Politics should not trump humanity or harm a vulnerable people in need of support and protection," he said in a statement.
The decision to cut more funding to the Palestinians comes as President Donald Trump's son-in-law and senior adviser Jared Kushner tries to craft a peace plan meant to launch negotiations between Israel and the Palestinians.
The Palestinian leadership cut off direct links with the Americans in November last year and relations further soured after Trump moved the U.S. embassy to Jerusalem in May. Palestinians want east Jerusalem as the capital of their future state and view the relocation of the embassy as a one-sided move that invalidates the U.S. as a Middle East peace broker.
Dan Shapiro, the former U.S. ambassador to Israel in the Obama administration, said Saturday that the Trump administration's apparent rationale behind the latest cuts was flawed.
"I gather the "logic" of the US cutting off aid to E Jerusalem hospitals is that it'll add pressure on the Palestinians to come to talks. "See, if you don't negotiate, the price only goes up." That will fail. And cutting off hospitals with no new $ lined up is indefensibly cruel,"he said on Twitter.
Aaron David Millar, vice president and director of the Middle East program at the Woodrow Wilson Center and a former adviser to six secretaries of state, said he failed to understand the logic behind what he described as "economic and political war" against the Palestinians.
The Palestinian leadership, he said, would not accept Trump's peace plan while security in the region was based in economic and social stability.
"In 40 years following U.S. policy in and outside government never seen any Administration simultaneously support Israel so uncritically and go after Palestinians so harshly both without logic, purpose or national security rationale," he said.
Josh Lederman reported from Washington, and Saphora Smith from London.