Two leading pro-Israel organisations have called for the British government to contribute funds to coexistence projects between Israelis and Palestinians.
A new report by the Middle East think tank Bicom also calls for improved financial aid guidelines to ensure funding is tied to results.
It also recommends funding should be continued and expanded to train the Palestinian Security Forces.
James Sorene, Bicom chief executive, said: “Britain is a very generous aid donor to the Palestinian Authority and large sums of UK taxpayers' money is spent on Palestinian education.
“This should be a positive investment in the future of young Palestinians but far too often Palestinian schools normalise terrorism and radicalise children.
"The UK has world-class expertise in school standards and inspections; more can and should be done to prevent extremism and promote dialogue.”
The report - "Supporting a two-state solution: effective UK policy to boost Israel-Palestinian relations” - highlights the UK government's spending of £422m on aid to the PA between 2011 and 2016, and that in 2016-2017 the Department for International Development (DFID), allocated £68.5m for eight projects that support the UK’s Middle East peace process policy.
The report details how this funding and expertise have already made a very significant contribution to training the PA security forces.
Labour Friends of Israel launched its campaign for an International Fund for Israeli-Palestinian Peace on Thursday.
The campaign aims to persuade the government to support the creation of an International Fund for Israeli-Palestinian Peace; a fund designed by the Alliance for Middle East Peace to boost spending on coexistence work.
Britain currently does not contribute any international development spend on co-existence, but LFI wants to see the government contribute £1.35m. This is a rough approximation of the UK’s share of the $50m (£38m) that Europe would be expected to contribute to the fund.
The other three-quarters would come from the US, the rest of the international community - including the Arab world - and private foundations and individuals.
In a joint statement, Gillian Merron, on behalf of the Board of Deputies, and Simon Johnson, on behalf of the Jewish Leadership Council, said: ”While direct negotiations between Israel and the Palestinian Authority are currently stalled, this is no excuse for the world to stand idle.
"Instead, we should be investing now in the kind of grassroots people-to-people projects which bring together Israelis and Palestinians and promote the values of peace, coexistence and reconciliation which will be needed to underpin any future political progress.
“We are pleased to support LFI’s campaign in support of an International Fund for Israeli-Palestinian Peace, which will help boost this much-needed on the ground, civil society work. We call on the government to support this initiative and use its influence in international fora to help bring this fund to fruition.”
In response to a Parliamentary question on the issue in January, the DFID said: "DFID is developing a programme of support to coexistence in Israel and the OPTs.
"UK support will help Israelis and Palestinians work together to achieve tangible improvements in their lives and build understanding between people on both sides of the conflict. The programme is now in its final design phase, aiming for launch in due course."