After a five-year legal battle, the court last year ordered the Palestinian Authority to pay the damages for the 1996 shooting deaths of American Yaron Ungar and his Israeli wife Efrat near an Israeli town.
When the Palestinian government did not pay, the lawyer for Ungar's estate, David Strachman, petitioned the court to block the assets.
Court papers show the US District Court in Rhode Island granted a temporary freeze on the assets of the Palestinian Authority, the Palestine Liberation Organisation and related officials and entities in April, and then blocked the funds indefinitely in May.
The defendants may still withdraw normal expenses from designated accounts to pay for the daily operation of their offices in New York and Washington.
The Boston Globe, which reported on the freeze on Tuesday, said the frozen assets include US holdings in a $1.3 billion Palestinian investment fund and bank accounts used to pay Palestinian representatives in Washington, but this could not be confirmed.
Strachman said he had also initiated a court action to seize and sell Palestinian-owned real estate in New York that serves as the Palestinian observer mission to the United Nations.
Neither officials at the Palestinian mission in New York nor the two lawyers representing the Palestinian Authority in the case were immediately available for comment.
In Washington, State Department spokesman Sean McCormack declined to comment on any details involving the lawsuit, which he said the US government was not a party to.
Asked whether the State Department was doing anything to try and "unfreeze" the funds, McCormack said he did not believe any assets had been seized yet.
"We are aware of the court case, very clearly. We have heard from the Palestinian Authority at a variety of different levels at the State Department on this matter. They've raised it with us," he said.
"At this point, we have not filed any briefs as part of this court case," McCormack said.
Strachman said the funds were already frozen and inaccessible to the Palestinian Authority.