The United States said last night it is reviewing its plan to provide $86 million (€76 million) to train and equip security forces loyal to Palestinian President Mahmoud Abbas.
The reason for the review is a proposed national unity government to be formed by Mr Abbas's Fatah faction and by Hamas, which leads the current Palestinian government but which the United States regards as a terrorist organisation.
US law bars giving taxpayer funds to such groups.
The national unity government, if one is formed, would bring Fatah and Hamas members under one umbrella and has forced the State Department to rethink its plan, which was originally designed to strengthen Mr Abbas' forces against those of Hamas.
"The fact that Fatah will now join a government led by Hamas terrorists - and will do so with Abbas's blessing - raises serious questions about the commitments and loyalties of the Palestinian security forces we have undertaken to assist," the two top members of House Foreign Affairs Committee said in a letter to US Secretary of State Condoleezza Rice.
"Questions arise as to whether these forces will be strictly under Abbas's control and whether Abbas, in line with our long-time belief, is truly committed to peace and non-violence," wrote the panel's chairman, California Democrat Tom Lantos, and top Republican, Florida's Ileana Ros-Lehtinen.
The US plan includes $35.5 million to provide non-lethal equipment, including riot gear and communications equipment, to Mr Abbas's National Security Forces and $25.9 million to provide non-lethal equipment to his elite presidential guard.