Donald Trump. Picture: REUTERS
Donald Trump. Picture: REUTERS

US President Donald Trump’s cut of more than $200m in aid for Gaza and the West Bank is the latest in a series of steps Palestinian leaders say aims to "liquidate" their cause.

The move follows Trump’s recognition in December of the disputed city of Jerusalem as Israel’s capital as well as his freezing of $300m in annual funding for the UN agency for Palestinian refugees.

Washington’s new policy on Jerusalem overturned decades of precedent and prompted the Palestinian leadership to break off relations with the White House.

The US president threatened to withhold aid until they returned to the negotiating table.

For many Israelis, the changes made by Washington are long overdue and bring years of failed peace efforts closer in line with reality.

But Palestinian leaders argue the White House is playing into the hands of Israeli politicians.

Speaking in June, when the US aid was merely frozen instead of cut, long-time Palestinian chief negotiator Saeb Erekat spoke of the need to "defeat the American-Israeli scheme to liquidate the Palestinian cause".

He and other Palestinian leaders reacted furiously to Friday’s announcement, with one calling it "cheap blackmail" to coerce them into accepting the peace plan that the White House has promised to unveil.

"America is now sharing in the dreams and the policies of Israel’s right-wing government," said Palestinian political analyst Jihad Harb.

But for Kobi Michael, former head of Palestinian issues at Israel’s strategic affairs ministry, Trump’s approach serves as a necessary rude awakening for the Palestinian leadership.

He cited Palestinians’ refusal to accept Jerusalem as Israel’s capital, and the UN’s method of classifying Palestinian refugees, as "characteristics which are much more than absurd in the eyes of the majority of Israelis".

The aid cut adds to the financial woes of the Palestinian Authority, whose $5bn budget for 2018 includes a $1.2bn deficit. Foreign aid was put at $775m.

Humanitarian conditions in the Israeli-blockaded Gaza Strip are also badly deteriorating.

The World Bank announced in July it was increasing its annual allocation to the Palestinians to $90m from $55m "in response to an increasingly difficult situation".