Few in Washington may realize that the issue of U.S. funding for Palestine is the talk of the town in Ramallah and other Palestinian cities. And the talk is not pleasant.

Abbas’s opposition is principled. The funds are part of an $800 million grant from the U.S. Agency for International Development that Congress appropriated in June 2009. Shortly before the funds were disbursed this summer, however, the larger grant was held up by Rep. Ileana Ros-Lehtinen. A Republican from Florida, Ros-Lehtinen, now chairman of the House Foreign Relations Committee, placed an informational hold on this budgetary line item in August. It is her prerogative to do so as a member of Congress. But rather than delay the funds to investigate a concern, the hold was meant as punishment — a warning to the Palestinian Authority not to seek recognition as an independent state at the United Nations General Assembly meeting the following month.

Abbas, of course, made the Palestinians’ application for statehood in September. And Palestinians note that when President Obama addressed the U.N. General Assembly in September 2010, he said he hoped that “when we come back here next year, we can have an agreement that will lead to a new member of the United Nations — an independent, sovereign state of Palestine, living in peace with Israel.” To Palestinians, their efforts for recognition fall within the Wilsonian doctrine of self-determination. But others don’t see it that way.

Ros-Lehtinen’s hold put a freeze on many education, health and democratic governance projects aimed at defusing tensions in the Middle East and building transparent Palestinian public institutions. In addition to funds for security services that were to be spent directly by the Palestinian Authority, which Abbas controls, the USAID grant included money for the U.S. consulate to use to support democratic initiatives. Intermediary organizations that were to oversee this spending included such U.S. groups as Sesame Workshop, World Vision, Internews, Save the Children and Amideast. Friends of the Earth, an Israeli-Palestinian-Jordanian organization, also was to participate.

After U.S. Defense Secretary Leon Panetta and Israeli Defense Minister Ehud Barak intervened last month, $200 million for the Palestinian Authority was unfrozen. Fifty million of those funds was to go toward ongoing projects, and $150 million was pegged for Palestinian security services. All other funding remains on hold, including $4.6 million that was intended for use by the U.S. consulate in Jerusalem under the Middle East Partnership Initiative. Established during the George W. Bush administration, MEPI was initially administered by Liz Cheney with the goal of empowering democratic initiatives in the Middle East. As the Arab Spring continues to drive change throughout the region, Palestinian leaders are feeling its effect. The millions earmarked for Palestinian security have become a hot potato.

Criticism of the Abbas administration has appeared in social media platforms and newspaper editorials. Palestinian Authority leaders have been accused of being security agents for Israel. Palestinian-Israeli security cooperation has become taboo in Ramallah. Meanwhile, even though Palestinians have provided unprecedented cooperation on security, Israeli provocations continue. The Israelis have not stopped building settlements or expropriating Palestinian lands.

It would be a political misstep to accept funds earmarked for security services while schools and nurseries are not completed. Palestinians would see the aid as analogous to the 30 pieces of silver that were accepted by Judas Iscariot when he delivered Jesus — a position Abbas does not want to be in.

Beyond the trouble caused by this hold, Congress is doing little to move other budget issues forward. Not only have U.S. lawmakers been holding up approved and obligated funds for Palestinians, but the 2012 budget also has not yet been discussed. Congress is making it difficult for the White House, the State Department and the Defense Department to conduct foreign policy.

The intricacies of foreign policy are usually unknown to the average American. But it doesn’t take much to understand that aligning with one side in the Middle East peace process not only erodes the United States’ diplomatic leverage but also plants the seeds of doom for the United States in a sensitive region.

Daoud Kuttab is a Palestinian journalist and former professor of journalism at Princeton University.