LONDON 

The European Union’s assistance to Palestine will continue without suspension, EU foreign policy chief Josep Borrell said Monday.

The announcement came in response to concerns that any suspension of payments would adversely affect the Palestinian population and potentially encourage terrorist activities in the region.

"The review of the EU's assistance for Palestine announced by the European Commission will not suspend the due payments, as clarified by the Commission’s press release," Borrell said on X.

"The suspension of the payments -- punishing all the Palestinian people -- would have damaged the EU interests in the region and would have only further emboldened terrorists," he added.

Borrell’s comments came after the EU announced a significant policy reversal on Monday, opting not to suspend development aid to Palestinians after an earlier announcement to freeze all aid payments sparked widespread criticism.

The EU's decision to backtrack comes after it initially declared that it would review all €691 million ($730 million) of development aid allocated to the Palestinians.

The initial announcement, made by EU Commissioner Oliver Varhelyi, had sent shockwaves through the international community.

Varhelyi had stated that all payments from the development program for Palestinians would be "immediately suspended" and all ongoing projects would be put under review, with new budget proposals postponed indefinitely.

However, the abrupt change in stance by the EU has left many puzzled.

Janez Lenarcic, the European Commissioner for Crisis Management, said: "While I most strongly condemn the terrorist attack by #Hamas, it is imperative to protect civilians and respect IHL (international humanitarian law). EU humanitarian aid to #Palestinians in need will continue as long as needed."

The Gaza-based Palestinian resistance group Hamas launched Operation Al-Aqsa Flood against Israel early Saturday, firing a barrage of rockets. It said the surprise attack was in response to the storming of Al-Aqsa Mosque in occupied East Jerusalem and growing settler violence.

In retaliation, the Israeli army launched Operation Swords of Iron against Hamas in the Gaza Strip.

The number of Palestinians killed by Israeli forces in Gaza has risen to 704, including 143 children and 105 women, the Gaza-based Health Ministry said early Tuesday.

It said the number of wounded has risen to around 4,000.

At least 900 Israelis have been killed and over 2,600 others wounded in the fighting, according to the Israeli Health Ministry.