The US government has announced that it is to give the Palestinian Authority $20 million in direct assistance.
The White House has imposed restrictions on the direct aid: it is to be used to pay Palestinian utility bills owed to Israeli companies.
A spokesperson for the Bush administration said the United States hoped the aid would encourage additional donations from other countries "at a time when the Palestinian Authority is in desperate need of budget support to pay its bills, maintain stability and allow it to focus on the larger question of governing."
The $20 million is part of a broader international effort to help the Palestinians following the death of Arafat, who Bush sidelined as an obstacle to peace. Mr Bush hopes the Palestinians will elect a leader who is more willing to negotiate with Israel.
The Palestinian Authority is facing a severe financial crisis due to falling tax revenues during four years of violence which has paralyzed the Palestinian economy.
"The upcoming Palestinian elections have made a functioning Palestinian Authority more important than ever," the senior Bush administration official said.
"The United States has a national security interest in helping to end the ongoing violence and terror in the Middle East and to make progress toward the president's June 24, 2002, vision of peace."