Currently, Sweden donates $107 million a year to the West Bank and Gaza, The Local.se reported Friday.
Development Aid Minister Gunilla Carlsson told Sveriges Radio the government is considering cutting that aid by about $30 million because that money is going to waste as neither Palestine nor Israel is willing to participate in peace negotiations.
"Is it worth continuing developing the prerequisites for a two-state solution if Israel and the Palestinians themselves do not want to sit down at the negotiating table?" Carlsson asked.
"I don't want to haggle with Swedish aid money, but I can only take the perspective of the Swedish taxpayer. One wants results. And if there are no chances of results, then we must take the consequences of that," Carlsson said.
Sweden's Social Democrat party has criticized cutting Palestine's aid, calling it a "provocation."
"To drop the Palestinians in the way that the government is now considering doing is wrong," said Kenneth G Forslund, the Social Democrats' aid policy spokesman.
Left Party aid policy spokesman Hans Linde agreed, saying Carlsson's plan is "absolutely the wrong way to go."
"Because of Israel's occupation we can see how the needs for foreign support and development assistance in the Palestinian territories actually grows," Linde said.