The European Union unveiled a €1.6 billion financial aid package on Monday to bolster the Palestinian Authority (PA) and fund development projects in the West Bank, Jerusalem, and Gaza, as Israel intensified its military offensive across the besieged enclave.
The two-year support plan allocates over a third of the funds—roughly €576 million—as direct budget assistance to the PA, aiming to strengthen governance, economic recovery, and public services. An additional €400 million in low-interest loans will be available to private businesses, while €82 million is earmarked for the UN Relief and Works Agency for Palestine Refugees (UNRWA).
Strengthening Post-Conflict Governance
EU Mediterranean Commissioner Dubravka Šuica emphasized the package’s focus on long-term stability. “Our program supports the Palestinian people in building a sustainable future,” she said after meeting Palestinian Prime Minister Mohammad Mustafa in Luxembourg. “A reformed Palestinian Authority must play a central role in Gaza’s post-conflict governance.”
The announcement coincided with renewed violence in Gaza, where Israeli airstrikes hit the Al-Ahli Hospital in Gaza City early Sunday, forcing evacuations. Gaza’s Health Ministry reported at least one patient died during the chaotic relocation, accusing Israel of targeting medical infrastructure. Israel’s military said the strike hit a Hamas command center and claimed precautions were taken to minimize civilian harm. Hamas condemned the attack as a “war crime.”
The conflict, triggered by Hamas’s October 7 assault on southern Israel that killed 1,200 people, has claimed over 50,000 Palestinian lives, according to Gaza’s Hamas-run Health Ministry, which does not distinguish between combatants and civilians. Of the 251 hostages taken by Hamas, 59 remain in Gaza, with 24 presumed alive.