US President Donald Trump's threat to withdraw aid to the Palestinian Authority (PA) would deprive Washington of its influence on the body, and could cause the Oslo accords to unravel, analysts say.
In a series of tweets on Tuesday, the US president threatened to cut off payments to the PA and accused its leaders of not showing enough "appreciation or respect" towards the US.
Trump wrote: "With the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?"
Though no move to cut off money to the PA has been confirmed, the comments come amid deteriorating ties between the Trump administration and Palestinian leaders.
Last month, the US sparked outrage among Palestinians and others over its recognition of Jerusalem as Israel's capital.
Since then, Palestinian President Mahmoud Abbas has vowed not to partake in any peace plan put forward by the US leader.
According to Ramallah-based development consultant, Sam Bahour, Trump's threat is not without precedent.
"This is not the first time cutting or threatening to cut funds were used for political coercion," Bahour told Al Jazeera.
"The most glaring example of this was when the US supported elections in 2006 and could not swallow the [idea of] Hamas winning, and the result was cutting funds to the Palestinian Authority."
Nature of aid
The US is one of the largest foreign contributors to the PA's Ministry of Finance, providing it with $477m in the period between January 2012 and May 2016, according to a study by Aid Watch Palestine.
US aid comes in the form of money to help run PA security forces, as well as to help the social welfare of Palestinians through organisations such as the UN Relief and Works Agency for Palestine (UNRWA).
"If the US withdrew its funding, then the PA could face a transformational financial crisis, depending on what form those cuts take," said Jeremy Wildeman, a University of Bath academic and one of the authors of the Aid Watch report.
But due to the irregular timing of payments by the US, the PA was "sustained" by other international donors and not fully reliant on Washington, Wildeman told Al Jazeera.
"The PA could potentially weather US cuts if those are just to direct budgetary support for the PA."
Where things would get difficult for the Palestinians, he argued, would be if the US also stopped funding social welfare projects in the occupied territories.
"The US is a very significant donor to Palestinian social welfare through multilateral funds, in particular, UNRWA, where it is far-and-away the biggest donor, accounting for nearly a quarter of UNRWA's budget with about $370m in 2016," Wildeman said.
UNRWA plays a significant role in supporting Palestinian refugees with access to education, healthcare, social services, and employment.
"If the US withdrew its funding from UNRWA, that would put enormous strain on the PA to cover those services for hundreds of thousands of Palestinians ... that it currently doesn't have to provision, and it would not be able to afford."
Wildeman, like others whom Al Jazeera contacted, argued that as long as welfare services, such as those provided by UNRWA, were left untouched, US cuts could be self-defeating and may even bring about benefit to the lives of ordinary Palestinians.
The US devotes significant, though undisclosed, sums of money to the PA security apparatus that many see as benefiting the Israeli occupation instead of the Palestinian people.
"A cut [to security forces] would likely be good, since that is not a priority for the Palestinians when their primary needs are liberation, equality and social welfare," he said, adding "there is an enormous debate as to whom they serve and for what purpose."
Wildeman stressed that US aid to the PA was not born of altruistic feeling and that the funds bought Washington a level of regional stability and a "client sympathetic to US interests among the Palestinian population". Cutting aid, he explained, could cost the US both.
"Without funding, that client is unlikely to follow US dictates and the idea that the US is the arbiter of the Peace Process.
"Further, without those funds, the PA loses the ability to fund that security apparatus and buy the loyalty of its own population."
Alaa Tartir, programme director of Al Shabaka: The Palestinian Policy Network, told Al Jazeera that US money is "fundamentally and inherently problematic" for Palestinians and that aid had served as the "complementary arm of the Israeli colonial occupation.
"US aid has been always used as a political tool, and the conditionality attached to it has always been harmful and damaging for the Palestinians," he said.
"The [...] cut will have some negative consequences on the lives of the Palestinians, yet the long-term prospect is more positive."
Trump's threat to cut aid offers the ordinary Palestinians a new opportunity to place the principles of self-determination and dignity in the core of the aid framework and industry.
Alaa Tartir, Al Shabaka: The Palestinian Policy Network
According to Tartir, who co-authored the Aid Watch Palestine report with Wildeman, resolving the political roots of Palestinian grievances trumps any benefits received from monetary aid.
He further explained that Trump's potential withdrawal of aid could force the PA to shift from maintaining the current status quo, which he holds responsible for the suffering of Palestinians.
"This action by the US administration must push the PA to abandon the framework of the Oslo Accords aid model.
"Trump's threat to cut aid offers the ordinary Palestinians a new opportunity to place the principles of self-determination and dignity in the core of the aid framework and industry."
That is a sentiment shared by Wildeman.
"By withdrawing its funding, the US could unravel the entire Oslo political process that the US and Western donors have basically driven since 1993," he said, adding many Palestinians do not see that as a negative development.
"You will hear quite a number of voices argue that this may not be a bad thing ... that Oslo needs to be abandoned since it represents the interests of those governments, and a new type of struggle for social and political rights (needs) to be taken up."