US Secretary of State Hillary Clinton at the weekend said Washington had transferred $200 million in US taxpayers' money to the Palestinian Authority to help cover what she called budget shortfalls.

The transfer is only part of a $900 million package Clinton pledged to the Palestinians at a donors conference in March.

Many Americans who actively observe the Israeli-Palestinian conflict have long complained that their tax dollars are being far too liberally spent to prop up a Palestinian Authority rife with corruption and mismanagement.

Clinton tried to soften the news of so much more money being given to the Palestinians by saying that the peace process was very close to getting back on track. That claim has been tossed out by senior US officials for several years in their efforts to justify continuing down the path of the failed land-for-peace process.