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Trump government to 'review' Obama's $220m payout for Gaza

Department of State says it will 'make adjustments' to ensure Obama's last-minute decision 'aligns with priorities of Trump administration'
Much of Gaza's infrastructure has been damaged or destroyed by the Hamas-Israel wars (AFP)

The US State Department is reviewing a decision made in the final hours of former president Barack Obama's administration to release $220m to help Palestinians rebuild the war-scarred Gaza strip.

Officials said some of the money has already been transferred but that President Donald Trump's new administration would investigate last-minute spending decisions to see if they can be adjusted.

"In a final act, then-secretary of state John Kerry instructed USAID to release $220.3m for Gaza recovery programmes," acting State Department spokesman Mark Toner said. 

"The Department of State is currently reviewing last-minute spending approved by the previous administration and will make adjustments if needed to ensure that it aligns with the priorities of the Trump-Pence administration."

While a close ally of Israel, the United States is also a major donor to international efforts to help Palestinians to recover from recent conflicts.

In his final weeks in office, Kerry was critical of Israel's building of settlements on occupied Palestinian land, warning that it undercuts efforts to negotiate a two-state final peace deal.

Trump's administration is expected to be more sympathetic to Israeli Prime Minister Benjamin Netanyahu's government, and the new president has chosen an ambassador with a track record of backing settlements.