31 Palestinians had so far been killed
US President Joe Biden met Palestinian leader Mahmoud Abbas in the occupied West Bank on Friday for talks expected to focus on economic measures.
His arrival in Bethlehem comes ahead of a visit to Saudi Arabia, whose leaders on Friday changed aviation rules in an apparent gesture of openness towards Israel.
Riyadh paved the way for Israeli planes to use its airspace by announcing it was lifting restrictions on "all carriers", a move welcomed by Biden as "historic".
The President's visit to the Saudi city of Jeddah will follow talks with Abbas, the latest high-level diplomatic meetings after those with the Israeli leadership on Thursday.
Turning his attention to Palestinian affairs, Biden visited a hospital in east Jerusalem on Friday where he announced a $100 million aid package for medical institutions in the area.
"These hospitals are the backbone of the Palestinian healthcare system," he said, after talking extensively about his own family's experience of emergency care.
With Israeli-Palestinian peace negotiations moribund since 2014, a US official said the delegation would be taking economic measures.
They include an "additional $201 million" for the UN agency serving Palestinian refugees (UNRWA), a senior administration official said.
Funding for the agency was cut by Biden's predecessor Donald Trump.
The US delegation will also unveil plans to roll out infrastructure for 4G internet across the Gaza Strip and the West Bank by the end of next year, fulfilling a longstanding aspiration among Palestinians as some of their Israeli neighbours already tap in to faster 5G networks.
Biden on Thursday reiterated Washington's support for "a two-state solution for two people, both of whom have deep and ancient roots in this land, living side by side in peace and security."
While Israeli Prime Minister Yair Lapid said he ultimately backs a two-state solution, the leader is not expected to take any steps towards a peace agreement ahead of elections in November.
The Israeli government has recently adopted an approach known as "shrinking the conflict", taking economic measures such as increasing the number of permits for Palestinians to work in Israel.
The World Bank put the poverty rate in the Palestinian territories at 27 percent last year, saying in April that the outlook "remains precarious and subject to additional political and security risks".
Iran's nuclear programme was the focal point of Thursday's talks.
Biden and Lapid signed a new security pact, in which Washington committed to using all its "national power" to ensure Tehran does not obtain a nuclear weapon.
Washington is currently trying to get the nuclear deal between Tehran and world powers back on track, after it was derailed by Trump's unilateral withdrawal in 2018.
In a tweet on Friday, Iran's Foreign Minister Hossein Amir-Abdollahian said Biden's trip to Israel was a "puppet show" that made his country "more determined" to protect its nuclear interests.
Following the visit to the West Bank, Biden will fly from Israel to Saudi Arabia.
Riyadh's decision to scrap airspace restrictions was welcomed as "good news" by Lapid.
"I thank the Saudi leadership for the opening of Saudi airspace. This is only the first step," added the premier, as Israel presses for closer regional ties.
The US President is expected to meet Arab leaders from the Gulf Cooperation Council, who are gathering in the Saudi city of Jeddah, to discuss volatile oil prices.
31 Palestinians had so far been killed
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