Donald Trump has ordered that $25m earmarked for the care of Palestinians in East Jerusalem hospitals be directed elsewhere as part of a review of American aid, a US state department official said on Saturday.

A statement from the Palestinian foreign ministry said the cut was part of a US attempt “to liquidate the Palestinian cause” and said it would threaten the lives of thousands of Palestinians and the livelihoods of thousands of hospital employees.

“This dangerous and unjustified American escalation has crossed all red lines and is considered a direct aggression against the Palestinian people,” it said.