By Patricia Zengerle
WASHINGTON (Reuters) - Legislation to sharply reduce the annual $300 million in U.S. aid to the Palestinian Authority unless it take steps to stop making what lawmakers described as payments that reward violent crime is set to be passed by the U.S. Congress this week as part of a major spending bill unveiled on Wednesday.
The measure, known as the Taylor Force Act, was named after a 29-year-old American military veteran fatally stabbed by a Palestinian while visiting Israel in 2016.
The act is intended to stop the Palestinians from paying stipends, referred to as "martyr payments," to the families of militants killed or imprisoned by Israeli authorities. The payments can reach $3,500 a month.
Force's attacker was killed by Israeli police, and his killer's family receives such a monthly payment.
U.S. House of Representatives and Senate leaders reached an agreement on Wednesday on the massive omnibus spending bill, which they aim to pass by Friday night.
Force's parents live in South Carolina, the home state of Republican Senator Lindsey Graham, who introduced the legislation.
"Passage of the Taylor Force Act will give us much needed leverage with the Palestinians to push back on this outrageous policy," Graham said in a statement on Wednesday.
The measure has been working its way through Congress for some time. Despite the generally strong pro-Israel sentiment of most lawmakers, it was held up by the concern of some members of Congress that cutting too much aid could lead to increased unrest and instability in the Palestinian territories.
President Donald Trump's fellow Republicans control majorities in both the House and Senate.
Palestinian officials have said they see the payments as necessary support for relatives of those imprisoned by Israel for fighting against occupation or who have died in connection with that cause.
(Reporting by Patricia Zengerle; Editing by Peter Cooney)