"These funds would quickly fall into the hands of Hamas in order to financially entice families of terrorists or even fund terrorism directly." This is not discretionary money, sunshine. It is used to pay the wages of the PA's pen-pushers. It can't be syphoned off without those employees going without their wages, and THEY will notice it, so will Israel and so with the Quartet. Hamas simply won't be able to do what you are suggesting.
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Some 100 protesting in Jerusalem against new civics curriculum (Haaretz)
from the article: The robbery is going off without a hitch