The United States has said it is restoring assistance to the Palestinians severed under former president Donald Trump with an announcement of $235 million.

President Joe Biden's administration said on Wednesday the United States would again support the UN agency caring for Palestinian refugees with a contribution of $150 million.

The United States will also offer $75 million in economic and development assistance for the West Bank and Gaza and $10 million for peace building efforts.

"US foreign assistance for the Palestinian people serves important US interests and values. It provides critical relief to those in great need, fosters economic development and supports Israeli-Palestinian understanding, security coordination and stability," Secretary of State Antony Blinken said in a statement.

READ MORE: What does Biden's restoration of aid to Palestinians mean?

Covid-added hardships

The funding is in addition to $15 million earlier announced by the United States in Covid assistance to the Palestinians amid criticism that Israel, a leader in vaccinating its own people, has not taken similar initiatives in territories under its occupation.

Israel argues that vaccination is the responsibility of the Palestinian Authority.

The UN Relief and Works Agency for Palestine Refugees in the Near East, or UNRWA, once counted on the United States as its top donor but has been facing a shortfall since Trump withdrew funds from 2018 on the argument that the refugees, some in camps for generations, should be resettled.

The agency said its needs have been rising due to Covid and the hardships faced by Palestinians living in war-battered Syria, troubled Lebanon and Jordan.

UNRWA said that it entered 2021 with liabilities of $75 million from the last financial year and that its annual deficit was expected to reach $200 million in the current year.

The Biden administration has been restoring relations and support for the Palestinians although stopping short of unveiling any new peace initiative to resolve the historic conflict.

Shortly after Biden's inauguration in January, the United States said it would restore the Palestine Liberation Organization's liaison office that was shut down by Trump.

READ MORE: UN agency for Palestinians hopes Biden will restore funding