When I worked as a prison chaplain, I came across more than one Palestinian terrorist behind bars. They usually received a check each month, deposited into their prison commissary accounts, from "their family in Palestine". We all knew this was from the Palestinian government. It was routine.
Strategy Page discusses what it calls this "pay-for-slay" terrorism, and its consequences for Palestine.
In the West bank the Palestinian Fatah government accuses Hamas of being unable to control all its Gaza factions and make it possible to form a unified Palestinian government. That is an accurate assessment but it ignores the fact the Fatah is equally self–destructive and unable to control its radical (terrorist) factions.
Case in point is Fatah threatening to cause an economic catastrophe in the West Bank by refusing partial payments from Israel and donor nations unless the donors and Israel stop deducting the money Fatah spends on supporting and encouraging terrorist activity. This has become more of an issue since 2018 when Israel passed a law to deduct from the $130 million a month it collects in taxes and fees for the Palestinians in the West Bank, the amount (over $20 million) Fatah pays out to Palestinian terrorists in prison or to the families of deceased terrorists. The U.S. had already enacted a similar law and was deducting a similar amount from the $300 million it currently gives to the West Bank Palestinians. Other foreign donors have taken similar measures. Fatah reuses to deal with this and as aid it cut Fatah maintains payments to terrorists by cutting government services it controls. That includes less money for Palestinians to receive medical care in Israel. To justify this Fatah complains that the U.S., Israel and other donors are being unfair.
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Monthly payments to jailed Palestinians vary according to how long they have been in jail, how many dependents they have and so on. There are also bonuses for how many Israelis the prisoner killed or injured.
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The Arab language media throughout the Middle East take for granted that these payments are just and necessary for the war against Israel. In response to the current American and Israeli efforts to penalize Fatah for what is spent to encourage terror attacks Fatah made it clear it would not halt payments to families for dead or jailed terrorists. Instead it cut pay to Palestinians who worked for the West Bank government. But by refusing money still being offered Fatah will cause widespread shortages of food and other necessities in the West bank.
There's more at the link.
As with aid to African countries, I think there's only one solution. Stop funneling aid through the Palestinian and Gaza governments altogether. Instead, distribute it through trustworthy aid organizations (which would automatically exclude most of the Muslim agencies and the United Nations, who are notorious for funneling aid money to terrorist groups and individuals). If that can't be done with adequate safeguards to prevent the funds being used for terrorism, then don't give money at all. Wait until such safeguards can be reliably implemented.
There are, of course, those who'll argue that this will impact innocent people who don't deserve to be caught in the backwash. Sorry, but that's disingenuous. It's those same innocent people who overwhelmingly elect extremists (including terrorists) to govern their territories, again and again. Let them make a choice. They can support terrorism, or they can eat. If they choose not to eat, pretty soon they won't be able to support terrorism, ever again. Starvation will do that. Works for me.