The United States said Wednesday it is restarting assistance to the Palestinians, announcing $235 million in new humanitarian, economic and development support, reversing a Trump-era decision to cut such funding.

The bulk of the money will go through the U.N. agency for Palestinian refugees - United Nations Relief and Works Agency (UNRWA) - which received $150 million. Another $10 million will be disbursed through USAID for peace-building programs; and $75 million will fund economic and development assistance in the West Bank and Gaza Strip. Security assistance programs also will restart.

"U.S. foreign assistance for the Palestinian people serves important U.S. interests and values," Secretary of State Antony Blinken said in a statement announcing the resumption of aid. "It provides critical relief to those in great need, fosters economic development, and supports Israeli-Palestinian understanding, security coordination and stability. It also aligns with the values and interests of our allies and partners."

In 2018, as relations between the Trump administration and the Palestinian Authority leadership deteriorated over the administration's decision to recognize Jerusalem as Israel's capital and move the U.S. Embassy there, the administration cut more than $200 million in bilateral aid. That year, it also began to cut its support to UNRWA, ultimately withdrawing more than $300 million in support.

UNRWA assists some 5.7 million Palestinian refugees in the Gaza Strip, West Bank, Jordan, Lebanon and Syria with essential services, including education and health care. The withdrawal of U.S. funding caused an unprecedented financial crisis for the agency.

UNRWA's Commissioner-General Philippe Lazzarini said at a U.N. meeting Wednesday before the official announcement that the agency would still have financial difficulties, even with restored support from Washington. It is facing a shortfall of more than $200 million this year to its core program budget, as needs grow.

"Our main priority is to keep all UNRWA services to Palestinian refugees in the region running," Lazzarini said.

But he welcomed the renewed engagement from the United States.

"There is no other institution that does what UNRWA does, and we are committed to protecting the safety, health and future of the millions of refugees we serve," he said in a statement after the announcement. "The U.S. contribution comes at a critical moment, as we continue to adjust to the challenges the COVID-19 pandemic presents. We encourage all Member States to contribute to UNRWA."

COVID-19 has complicated an already stressed situation. The West Bank is in the midst of a third wave of the virus, while Gaza is in a second wave.

Gwyn Lewis, director of UNRWA operations in the West Bank, said the pandemic has dramatically affected the economy, with incomes cut in half in 40% of West Bank households, while unemployment in Gaza is a staggering 49%.

The Palestinian Authority launched a vaccination campaign in February. And Israel said in March it would vaccinate 100,000 Palestinians who have permits to work in Israel. The World Health Organization's COVAX facility has sent an initial shipment of 200,000 doses of vaccine.

Jordan and Sweden have said they plan to host an international conference later this year, tentatively in late June or early July, to reengage the international community around UNRWA. The agency has long suffered from a lack of predictable, consistent and adequate funding.

"This would be a very needed, significant amount of money to address the challenges that UNRWA is facing," Palestinian U.N. Ambassador Riyad Mansour said of Washington's resumption of funding to UNRWA.

Gilad Erdan, Israel's U.N. ambassador, opposed the decision.

"In conversations with the U.S. State Department, I have expressed my disappointment and objection to the decision to renew UNRWA's funding without first ensuring that certain reforms, including stopping the incitement and removing anti-Semitic content from its educational curriculum, are carried out," Erdan said in a statement.

UNRWA operates more than 700 schools across the region, providing education for more than a half-million Palestinian children. The U.N. agency says it has a zero-tolerance policy for discrimination and incitement to hatred and violence in all of its schools and operations.

Since its establishment in 1949 until the Trump administration decision in 2018, the United States was UNRWA's largest donor.

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