The government will provide up to £3 million for projects where Israelis and Palestinians work together over the next three years.
Details of the co-existence programme emerged on Tuesday, with Alistair Burt, the Middle East Minister, announcing the funding for “people-to-people” initiatives.
Labour Friends of Israel has been leading the call for the government to do more to assist such projects over the past five years.
In 2015-16 there was £150,000 of taxpayer money put towards co-existence projects, but the sum was cut to zero last year.
Asked by Paul Masterton, the Conservative MP for East Renfrewshire, what support the Department for International Development would provide for projects “intended to foster co-existence between Palestinians and Israelis”, Mr Burt revealed the sum.
He said: “DfID will provide up to £3 million over three years to fund a co-existence or ‘people-to-people’ programme.
“This UK support will help Israelis and Palestinians work together to achieve tangible improvements in their lives and build understanding between people on both sides of the conflict.”
Welcoming the announcement, Joan Ryan, LFI chair, said: “LFI is delighted that the government appears to have listened to our calls on this important issue.
“Our five-year campaign for greater co-existence funding was based on the premise that bringing Israelis and Palestinians together will promote reconciliation, trust and understanding between the two peoples which is vital in underpinning any successful peace process.
“The government now needs to ensure co-existence work reaches its full potential by supporting the campaign for an International Fund for Israeli-Palestinian Peace.
“We congratulate all those who have campaigned alongside LFI for greater spending on people-to-people projects and, most importantly, pay tribute to the Israelis and Palestinians who undertake this crucial work.”
Ms Ryan has heavily lobbied ministers in the past year in an attempt to secure the funding.
James Sorene, chief executive of Bicom, the Israel and Middle East think tank which last week published a report on co-existence projects, said: “We welcome this announcement from DFID minister Alastair Burt, but hope this is just the start of long-term UK financial support for Israeli-Palestinian co-existence projects.
“Last week Bicom published a ground-breaking study of Israeli-Palestinian peacebuilding programmes analysing more than 20 years of evaluation data and speaking to hundreds of Israelis and Palestinians in Israel and the West Bank. The evidence is clear that these projects have profound long-term impact.
"One in five participants went on to devote their careers to peace building and an average of 80 per cent of people said they trusted the other side more and wanted to work for peace after taking part.
“Based on all the evidence we recommended that the UK significantly increase its funding in these projects and we are hugely encouraged that DfID has made a clear commitment for the next three years. But to ensure long term change the funding needs to be long term and substantial.
“Our study is a comprehensive guide for practitioners and funders in this field full of practical advice to ensure success. We would urge DfID to study it carefully.”
Conservative Friends of Israel welcomed the announcement. In a statement, Lord Polak, the group's honorary president, and James Gurd, its executive director, said: “For years, CFI has been a strong and proud supporter of peaceful coexistence projects, which facilitate positive interaction between Israelis and Palestinians and ultimately form the foundation of a lasting two-state solution.
"We are delighted that Secretary of State for International Development, Priti Patel, has secured this unprecedented funding, which together with the redirection of Palestinian Authority aid to health and education will ensure taxpayers value for money while directly supporting conflict resolution."