Obama and Abbas - AP - June 9, 2010
President Barack Obama meets with Palestinian leader Mahmoud Abbas, Wednesday, June 9, 2010, in the Oval Office at the White House in Washington. Photo by AP
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The Obama administration on Tuesday defended the U.S. aid to the Palestinian Authority, telling Congress the assistance is critical to peace and stability in the Mideast.

Testifying before a House panel, officials from the State Department said Tuesday that helping to build Palestinian governmental institutions and an economy is essential to the security of both Israel and the Palestinians.

Last week, the House overwhelmingly backed a resolution calling on the Obama administration to consider suspending aid to the Palestinian Authority in light of the deal between the government and Hamas, considered a terrorist group by Israel and the U.S.

Deputy Assistant Secretary of State Jacob Walles said the administration will closely monitor whether a new government emerges and will reassess the aid.