The US State Department placed Hamas leader Ismail Haniyeh on its terror blacklist on Wednesday in a move that threatened to further inflame tensions with Palestinians.

The 55-year-old, who became chairman of Hamas’s political bureau in May 2017 and was previously the prime minister of a breakaway Palestinian government in the Gaza Strip, was made a “Specially Designated Global Terrorist”.

The designation means any assets held by the Hamas leader in the United States will be frozen, while US citizens and businesses are now banned from doing business with him.

“Haniyeh has close links with Hamas’s military wing and has been a proponent of armed struggle, including against civilians,” a State Department statement said.

“He has reportedly been involved in terrorist attacks against Israeli citizens. Hamas has been responsible for an estimated 17 American lives killed in terrorist attacks.”

The State Department also placed sanctions on Hakarat al-Sabireen, a Gaza-based organisation that has close links to Iran, and two groups active in Egypt named Liwa al Thawra and HASM.

Hamas itself was designated as a terrorist organisation by the US in 1997.

“These designations target key terrorist groups and leaders – including two sponsored and directed by Iran – who are threatening the stability of the Middle East, undermining the peace process, and attacking our allies Egypt and Israel,” Rex Tillerson, Secretary of State, said.

“Today's actions are an important step in denying them the resources they need to plan and carry out their terrorist activities.”

Relations between Palestinians and the US were already strained by President Donald Trump’s decision to change his country’s policy and recognise Jerusalem as Israel’s capital.