This report discuses President's Trump's announcement recognizing Jerusalem as the capitol of Israel and stating that the U.S. embassy would be moved there from Tel Aviv "as soon as practicable". It includes an overview of policy questions and concerns, international reactions, and Congressional reactions.

This report describes issues related to U.S. aid provided to Palestine to support prevention/combating against terrorism, creating coexistence with Israel and self-governance, and meeting humanitarian needs. In includes introductory and historical background as well as in-depth analysis of the types of U.S. bilateral aid to Palestine, U.S. contributions to the U.N. Relief and Works Agency for Palestine Refugees in the near East (UNRWA), and the issues involved in determining future aid.

The United States began contacts with the PalestineLiberationOrganization (PLO)in December 1988, after the PLO accepted Israel’s right to exist, accepted U.N. Resolutions 242 and 338 that call for an exchange of land for peace, and renounced terrorism. The United States continues its contacts with the PLO and the Palestinian Authority elected in January 1996 and is an active broker in the continuing Middle East peace process.

Israeli-U.S. relations are an important factor in U.S. policy in the Middle East, and Congress has placed considerable emphasis on the maintenance of a close and supportive relationship. The main vehicle for expressing support for Israel has been foreign aid; Israel currently receives about $3 billion per year in economic and military grants, refugee settlement assistance, and other aid. Congress has monitored aid closely along with other issues in bilateral relations, and its concerns have affected Administration’s policies.