The US has said it plans to offer $235 million (around £170m) in aid to Palestinians in a significant reversal of the previous administration’s policy. 

The country rolled back aid to Palestinians and cut funding for the UN Relief and Works Agency in 2018, a relief body that supports Palestinian refugees.

 A large chunk of the money, $150m (£109m), will go to UNRWA, but the package also includes $75m (£54m) in economic and development assistance in the West Bank and another $10m (£7m) for peacebuilding programmes. 

US Secretary of State Anthony J. Blinken said on Wednesday that “all assistance will be provided consistent with U.S. law.” 

He also said that foreign assistance “serves important US interests and values” and “aligns with the values and interests of our allies and partners.” 

Mr Blinken reiterated the US’s commitment to advancing “prosperity, security, and freedom for both Israelis and Palestinians in tangible ways in the immediate term” including as a means to advance towards a two-state solution.

The announcement was welcomed by Palestinian leaders but criticised by Israeli ambassador to the UN and US Gilad Erdan. 

The top Israeli diplomat said he believes UNRWA should “not exist in its current format.” 

“Rather than solving the conflict, UNRWA perpetuates it. Any return to funding it must be contingent on essential reforms,” Mr Erdan added.