Donald Trump has defended the policy.

Donald Trump has threatened to cut Palestinian aid, in an escalation to the conflict between leaders.

The US has made clear that unless the Palestinian Authority is willing to negotiate, US aid will be cut to the UNRWA, the UN’s agency for Palestinian refugees.

In a classic Trump move, the US President took to Twitter to say: “the Palestinians HUNDRED [sic] OF MILLIONS OF DOLLARS a year and get no appreciation or respect. They don’t even want to negotiate a long overdue … peace treaty with Israel.”

“We have taken Jerusalem, the toughest part of the negotiation, off the table, but Israel, for that, would have had to pay more. But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?”

Palestinians have said that these tweets prove how the US cannot be a neutral party in any form of peace talks.

“The United States has proven to be a dishonest mediator in the peace process,” said Palestinian President Mahmoud Abbas, who has said he will not accept any US peace plan for the Middle East.

The tweets come following Trump’s decision to formally recognise Jerusalem as Israel’s capital, causing unrest in the region.

Speaking at a news conference, US envoy to the United Nations, Nick Haley, clarified Trump’s tweets.

“The president has basically said that he doesn’t want to give any additional funding, or stop funding, until the Palestinians are agreeing to come back to the negotiation table.”

“The Palestinians now have to show their will that they want to come to the table. As of now, they’re not coming to the table but they asked for aid.

“We’re not giving the aid, we’re going to make sure that they come to the table,” she said.

The aid provided means the agency can run education, health, and social programmes. The US is the donor, providing almost $370 million (£270m) in 2016.