The United States has cut more than $200 million (approximately Rs 1,400 crore) in aid to Palestinian Authority, just months after it reduced its contribution to the UN Relief and Works Agency for Palestine Refugees, Al Jazeera reported on Saturday.

An unidentified senior official of the US State Department said the decision to cut the aid was taken after a review of US assistance to the Palestinian Authority and “at the direction of the president”.

The funds, which were originally planned for programmes in West Bank and Gaza, would be redirected to “high-priority projects elsewhere”, the official said. “We have undertaken a review of US assistance to the Palestinian Authority and in the West Bank and Gaza to ensure these funds are spent in accordance with US national interests and provide value to the US taxpayer,” the official said in a statement, according to Reuters.

The official said the decision also considered “the challenges the international community faces in providing assistance in Gaza, where Hamas control endangers the lives of Gaza’s citizens and degrades an already dire humanitarian and economic situation”.

“We will work with Congress to redirect these funds to other policy priorities,” another State department official said.

The Palestine Liberation Organization termed the US move as the use of “cheap blackmail” as a political tool. “The rights of the Palestinian people are not for sale,” Al Jazeera quoted a statement by PLO executive committee member Hanan Ashrawi. “The Palestinian people and leadership will not be intimidated and will not succumb to coercion.”

“The US administration has already demonstrated meanness of spirit in its collusion with the Israeli occupation and its theft of land and resources; now it is exercising economic meanness by punishing the Palestinian victims of this occupation,” Ashrawi said.

The relationship between the US and the Palestinian leadership has deteriorated since Palestinians boycotted US peace efforts following the relocation of the US Embassy in Israel’s Tel Aviv to Jerusalem. Over 50 people were killed in clashes between Israeli troops and Palestinian protestors along the Gaza border after the relocation.