How did cuts in U.S. aid affect the Palestinian Authority during the late 2010s?

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Oslo Accords: Declaration of Principles on Palestinian Self-Rule — Palestinian Authority U.S. Pres. Bill Clinton (center) looking on as Israeli Prime Minister Yitzhak Rabin (left) shakes hands with Palestinian leader Yasser Arafat after the signing of the Declaration of Principles on Palestinian Self-Rule, September 1993.

During the late 2010s, the Palestinian Authority (PA) faced severe financial hardship due to a combination of factors, including significant cuts in support from the United States, Israel, and various Arab nations.1

Following the U.S. decision to move its embassy to Jerusalem in 2017, diplomatic relations between the PA and the U.S. deteriorated. Consequently, in 2018, the United States—previously the largest donor of foreign aid to the Palestinians—began cutting funding to the PA and its associated aid programs.1

These cuts exacerbated the PA's financial instability, which was further strained by:
* Tax Revenue Withholding: Israel began withholding a portion of the tax revenue it collects on behalf of the PA, specifically targeting funds equivalent to the stipends the PA paid to families of Palestinians imprisoned or killed by the IDF.1
* Regional Economic Shifts: Support from Arab states declined as those nations grappled with their own financial crises caused by a slump in global oil prices.1

This loss of international support weakened the PA, leaving it struggling to remain afloat and creating a more precarious situation for Palestinians in the West Bank.1