The United States next week is set to hold its "Peace to Prosperity" economic workshop in Bahrain's capital, Manama. But the June 25-26 conference, part of the Trump administration's long-awaited "deal of the century," has already come under scrutiny. Days before the start, it remains unclear who will participate and what it aims to achieve.

The secretive peace plan has been worked out by Trump's son-in law, Jared Kushner, and by special envoy Jason Greenblatt. The participating countries and business representatives are expected to discuss "economic strategies" to help boost the troubled Palestinian economy, according to the invitation, but without the Palestinians being present.

Early on, representatives from the Palestinian Authority declined to attend, stating that any solution to the conflict must address the political context. "We accepted to go to negotiations on the basis of land occupied in 1967 and East Jerusalem as our capital," Nabil Abu Rudeineh, the Palestinian information minister in Ramallah, told DW. "If Trump and the Israelis are ready, this is the way, not Manama, not Warsaw, not Washington."

Israeli officials were also not invited, in order to not to "politicize the event," according to the Trump administration, though some Israeli businessmen and journalists will apparently be present at the conference. Bahrain and Israel have no official diplomatic relations.

The overall political plan's unveiling has been postponed many times and could now be held up at least until November, as Israel prepares for new elections in September and the US presidential election campaign continues to pick up speed.

US policy shifts: Funding cuts

Meanwhile on the ground, US-funded nongovernmental organizations delivering humanitarian services in the occupied Palestinian territories have to deal with the aftermath of Washington's aid budgets cuts. Last year, the Trump administration slashed roughly $500 million (€440 million) in aid to the Palestinians.

"It has severely affected our ability to deliver services to the most needy in the West Bank and Gaza. These services included fresh water projects, education, health, agriculture, and were all funded by USAID," said Jack Byrne, country director for American Near East Refugee Aid (ANERA), which has been working in the Middle East for decades.

In a major US policy shift, the Trump administration last year also halted funding for the UN agency for Palestinian refugees, UNRWA. It also announced that it would also cut $200 million in development aid, channeled through the US government's development agency USAID. As of February this year, all assistance by USAID was ended, except for some "conflict management" grants for special programs.

Restrictive legislation

Much of the US assistance used to be implemented through international NGOs such as ANERA. So far, it has been difficult to fill the funding gaps. "There is severe donor fatigue, and this is a very sensitive and politicized part of the world," said Byrne. "We don't see [other] donors stepping up in a way that we used to."

ANERA has had to stop renovating a school in the occupied West Bank and much-needed water infrastructure projects in Gaza were put on hold. The organization also had to substantially reduce its staff.

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The funding cuts are being felt across the NGO sector, said Blake Selzer, a spokesperson for AIDA, an umbrella association for international development agencies. "Economic investment is important and welcomed. But what's important is to address the underlying causes of the need for these humanitarian programs," he said. "And that is primarily addressing the issue of occupation: the blockade of Gaza. We'd rather see the individuals we are working with have their own economic opportunities and we wouldn't have to provide a humanitarian bandage."

The Anti-Terrorism Clarification Act, signed into law by Trump last year, further complicated the situation. The legislation, which took effect in February, stipulates that recipients of US foreign aid could face litigation in US courts. To the Palestinian Authority, this meant that it could potentially be compelled to pay compensation to families of US victims of Palestinian attacks dating back years. Since February, the PA has declined to take further aid from the US.

The Bahrain 'Band-Aid'

Relations between the US and Palestinian leadership have soured since Trump's recognition of Jerusalem as Israel's capital in late 2017. The Palestinian Authority has since severed all diplomatic ties with Washington. Some analysts believe the Bahrain conference is just part of the Trump administration's continued policy in the region and a step away from Palestinian independence.

"They have already made many moves before [the conference] sets out, and one of them is this issue of funding," said Sam Bahour, an American-Palestinian economic analyst living in Ramallah. "Cutting funding at various levels and then coming and saying: 'We want economic prosperity!' The mix in this kind of message is bold. You slap somebody almost to death and then you say: 'Come here, I'll give you a Band-Aid, let's fix your face.'"

Palestinians have also urged other countries not to participate in the event. So far, Saudi Arabia and the United Arab Emirates have confirmed their attendance. Egypt and Jordan reportedly signaled they may send representatives but it is not clear at what level, with officials stressing the need for a political approach and downplaying the importance of the event.