The Bush administration had publicly promised to ask Congress to transfer the funds in order to bolster Abbas and his forces. Due to the uncertainty of a few legislators, the transfer has been postponed indefinitely.
The State Department was informed of the decision ten days ago by Democratic Congresswoman Nita Lowey, who also chairs the House of Representative's Subcommittee on Foreign Operations, Export Financing and Related Agencies.
According to Lowey, the funds will not be transferred until the cabinet has elaborated on the designation of the aid. Lowey said Congress was not given sufficient information regarding where and why the funds were being transferred.
Bush had said that the money would be used to fund training for Abbas's security forces, and to supply them with uniforms and other equipment.
The transfer of funds was frozen before the rival Palestinian factions Hamas and Fatah signed a unity government agreement in Mecca. Lowey's office told Haaretz Tuesday that following the agreement, legislators have expressed even greater doubt over transferring the money. Observers in Washington told Haaretz that Lowey is one of Congress' most staunch supporters of Israel.
At this stage, the money will not be transferred to Palestinian leaders until Congress is convinced such a move should be implemented.