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A question on this site stated that the average amount of money being sent to Palestine by the USA is around $500M/year in aid. My question is why is the USA sending Palestine any foreign aid money at all? Considering that the US is allied with Israel, why would it send money to a state that ally is in conflict with?

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    Welcome on Politics.SE. Your last line describes Palestine as "a state" but neither the USA nor Israel recognize it as such, even if some others states do. From the point of view of the USA, they do not "send money to a state" but to a population represented by political entities (mainly the Palestinian Authority), NGOs, or... Israel itself. – Evargalo May 18 at 14:20
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    @Evargalo that sounds like the start of an answer :) – Ekadh Singh May 18 at 14:26
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Probably several things:

  • Money brings influence. Without influence on the Palestinians, the US has even less leverage to shape Palestinian policy in a way that is acceptable to Israel.

  • Palestine is a humanitarian disaster. Much as Israel claims it's not responsible for the area, it is largely perceived to be a primary cause of the problem (along with corruption by Hamas and Fatah) and responsible for its management, as the occupiers, by the rest of the world.

The Palestinian economy relies heavily on external assistance. It receives more than $300 for each of the 3.5 million Palestinians living in the West Bank and Gaza Strip – a level unprecedented in any other conflict since the Second World War. This level of aid has been maintained for over four years, exceeding the lifespan of other high-profile emergencies – such as Kosovo and Afghanistan – where aid peaked and waned. Aid is meeting the humanitarian needs of Palestinians in a conflict where the responsibility for these people, under international humanitarian law, lies with Israel as the Occupying Power.

So one interest the US has is to make sure that it doesn't get much worse and reflect more badly on Israel. It might even let Israeli politicians off the hook domestically to have a friendly power provide help that they would have to do so otherwise.

From the horse's mouth, the State Department:

U.S. foreign assistance for the Palestinian people serves important U.S. interests and values. 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. The United States is committed to advancing prosperity, security, and freedom for both Israelis and Palestinians in tangible ways in the immediate term, which is important in its own right, but also as a means to advance towards a negotiated two-state solution.

  • On a less cynical note, the US also has long had the tradition of providing aid to nations and people needing it, often even when they are in disagreement with them.

Some remarks on the question: first, 500M/year isn't necessarily just from the US, though the question does not make that clear. Second, there is a difference in US funding for Gaza/Hamas-governed areas vs West Bank/PA-governed area, again glossed over.

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    to shape Palestinian policy in a way that is acceptable to Israel”—surely you mean “in a way that suits US interests”? Just because Israel and the US are allies does not mean that their interests are entirely aligned. – eggyal May 19 at 15:45
  • Don’t answer, just think about it: Is it really “meeting the humanitarian needs of Palestinians” or like so many other places, is it hijacked by the powerful, leaving those in need no better off? – WGroleau May 20 at 15:46
  • @WGroleau This is addressed in the very first bullet: the more they hijack the more dependent on this money they become. – მამუკა ჯიბლაძე May 20 at 17:23
  • That may be, but if so, it doesn’t do the things the State Department quotes claim it does. – WGroleau May 20 at 17:33
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From the comments:

[...] They're humans, enduring constant tragedies, and we have the capability to help them [sic]
- TylerH 2021-05-17

At any rate, you can read about why in the US government's official statement, here: https://www.state.gov/the-united-states-restores-assistance-for-the-palestinians/ In short, it's for food, medicine, and education.
- TylerH 2021-05-17

Foreign aid is for civilians, not the military or insurgents or whoever Israel is fighting. The US also gives aid to countries that have explicitly called for the annihilation of Israel at the state/govt level, so Palestine is not unique, or even the most perplexing case. - TylerH 2021-05-17

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