More than $60m (£46m) in annual funds for the Palestinian security services has now ended, and – while Israel has backed some previous cuts in US aid for Palestinians – officials have expressed concern about this move.
It is thought that co-operation with Israeli forces, which helps keep relative calm in the West Bank, could be affected.
The Anti-Terrorism Clarification Act (ATCA), passed by Congress and then signed into law by President Donald Trump last year, has just come into force.
This allows Americans to sue those receiving foreign aid from their country in US courts over alleged complicity in “acts of war”.
At a news conference on Thursday, senior official Saeb Erekat said the Palestinian Authority (PA) had sent a letter to the US state department asking them to end funding because of a fear of lawsuits.
“We do not want to receive any money if it will cause us to appear before the courts,” he said.
The PA denies Israeli accusations that it incites militant attacks.
“We are not seeking anything, the Americans have made their decision, but we will continue to participate in the fight against terrorism in the region,” Mr Erekat went on.
He pointed out that there were currently cases against three banks operating in the Palestinian…