Fighting between Abbas's Fatah faction and Hamas has surged since talks on forming a unity government collapsed and Abbas called for early parliamentary and presidential elections. Hamas accused Abbas of mounting a coup.
The U.S. money will be used to "assist the Palestinian Authority presidency in fulfilling PA commitments under the road map to dismantle the infrastructure of terrorism and establish law and order in the West Bank and Gaza," a U.S. government document obtained by Reuters said.
Haniyeh, Abbas agree to defuse tensions
Palestinian Prime Minister Ismail Haniyeh said on Friday he and Abbas had agreed at emergency talks to keep gunmen from their rival Hamas and Fatah factions off Gaza's streets after six people were killed and 18 were wounded.
"We have expressed our regret and sorrow for these incidents that do not reflect our struggle," Haniyeh told reporters at Abbas's office at the end of their first meeting in two months.
Haniyeh said he and Abbas agreed to "withdraw all gunmen from the streets and deploy police forces to keep law and order."
Abbas made no public comment after the session, but a diplomat who attended the talks and declined to be identified confirmed an agreement had been reached.
Similar pacts in the past have been shattered swiftly by violence and Gazans said they feared another eruption of bloodshed later in the day when Thursday's dead are buried.
Gunbattles broke out between forces loyal to Abbas and the Hamas government in northern Gaza on Thursday, killing six people and wounding 18 other people, witnesses said.
In the northern Gaza Strip, a senior Palestinian security officer allied with Fatah was killed when Hamas militants laid siege to his house, engaging in a protracted gun battle with his guards, and then attacked it with grenades and a dozen rockets, Palestinian officials and witnesses said.
The officer, Colonel Mohammed Ghayeb, was on the phone to Palestine TV just moments before his death and appealed for help as his house came under attack. Ghayeb's wife was seriously wounded in the attack, in which Hamas fired assault rifles and rockets at the building.
"They are killers," he said of the Hamas gunmen. "They are targeting the house, children are dying, they are bleeding. For God's sake, send an ambulance, we want an ambulance, somebody move."
The battle outside the house raged for much of the day and killed four of Ghayeb's guards and a Hamas gunman. About three dozen people, including eight children, were also wounded.
Ghayeb was the chief of the Preventive Security Service in northern Gaza, and his killing was expected to trigger revenge attacks by the men under his command.
During the standoff outside Ghayeb's home in Beit Lahiya, dozens of women rushed into the streets in protest, chanting "Spare the bullets, shame, shame."
One resident, Amina Abu Saher, told the local Al Quds radio station that it was difficult for her to see Palestinians fighting each other and said she and the other women were determined to stop the internal fighting.
Haniyeh called for calm in the wake of the renewed internal violence. Five people were killed on Wednesday in fighting.
"These clashes must stop, this bloodshed must end. Let all of you love one another, let's resolve differences through dialogue and not with weapons," Haniyeh told reporters after returning from making the Haj pilgrimage in Saudi Arabia. "Weapons must only be directed against the Israeli occupation," he added.
The two sides declared the truce in an attempt to end violence that surged after Abbas challenged Hamas by calling for early parliamentary and presidential elections after unity government talks failed.
Also Thursday, unknown gunmen fired on mourners at a funeral for three security officers loyal to Abbas who were among those killed the day before.
Fatah sources and medical officials said two mourners were wounded during the funeral march in central Gaza when gunmen shot at the procession.
A senior Hamas member was also kidnapped by unidentified gunmen in Gaza City, the Islamists said.
Abbas met with leaders of political factions in Gaza on Thursday night. The smaller Islamic Jihad group, which has stayed out of the fighting, was to propose another round of unity talks, this time between Abbas and Hamas' supreme leader, Khaled Meshal, rather than between lower-level envoys.
As the fighting worsened, Haniyeh of Hamas cut short a tour of Arab nations and returned to Gaza on Thursday. His next stop was to have been Jordan, which has offered to host a meeting between Haniyeh and Abbas, in an attempt to defuse the tensions.