The United States Congress has blocked nearly $200m in aid to the Palestinians, the U.K’s Independent newspaper reported on Saturday.

The aid, which was destined for projects related to food aid, health care, and state building efforts, was to have been transferred to the Palestinian Authority during the U.S. fiscal year that ends today, according to the report.

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However, following what the Independent described as an “unpublicized block” imposed on funding to the Palestinians since August this year, in response to the Palestinian bid for statehood at the UN, the remainder of the aid allocated to the Palestinian Authority for the current financial year will not be transferred.

The Independent reported that the block by three Congressional committees has been in force since August 18, when it was formally notified that USAID, the U.S. government aid agency, wanted to transfer the remaining $192m funding for the current fiscal year.

Obama’s administration is unable to commit further funding to the Palestinian Authority unless it persuades Congress to lift the freeze, according to the report.

The decision was strongly condemned by the Palestinian Authority on Friday, the Independent said.

Ghassan Khatib, chief spokesman for the Palestinian Authority said on Friday that, "this is not constructive at all. Such moves are unjustified,” the Independent reported.

“These are mainly humanitarian and development projects, it is another kind of collective punishment which is going to harm the needs of the public without making any positive contribution," the Independent reported him as saying.

There have been demands in Congress throughout the year to withhold funding to the Palestinian Authority if it pursues the UN route to statehood. Rep. Gary Ackerman, member of the House Subcommittee on the Middle East and South Asia, said on Monday at a gathering of Congressmen and leaders of Jewish organizations outside the United Nations headquarters in New York that "there may need to be a total cutoff of all aid to the Palestinians for pursuing this course of action which is very dangerous and ill advised."

Resolution 268, passed by a majority in the Congress in July, urged the Obama administration to suspend financial assistance to the PA if it pushed for a UN vote on recognition of statehood, and called for a renewal of direct talks with Israel and the Palestinians.

The UN Security Council panel on admitting new members to the United Nations met on Friday for the first time on the Palestinian bid to join the world body as Palestinians lobbied council members for support.

The United Nations panel responsible for admitting new members will likely mull the Palestinian statehood application for several weeks before making a decision, diplomatic sources said Friday.

The general consensus at the United Nations headquarters in New York is that the panel discussions over the Palestinian application for full membership will continue to deliberate over technical matters as long as the U.S., European Union and the Quartet are leading efforts to renew negotiations between Israel and the Palestinian Authority.

According to diplomatic sources, the U.S. and its Western allies have a special interest in ‘dragging’ the debate on, with the purpose of giving their efforts vis-à-vis Israel and the Palestinian Authority a fighting chance.