The U.S. is nearing an agreement with the Palestinian Authority to end its program that financially rewards the families of terrorists who commit acts of violence against Israel, Politico reported Friday, citing two Biden administration officials.

The PA, which controls parts of the West Bank, has been under intense pressure by the U.S. to reform so it can govern the Gaza Strip when Israel's war against Iranian-backed Hamas terrorists ends. On Thursday, the PA announced members of a new cabinet, including ministers who were born in Gaza, The Washington Post reported, a sign the cabinet intended to be "fully representative of the Palestinian people."

But the PA is not popular among Palestinians, who voted for Hamas over the PA to run Gaza in 2006, nor with Israelis and Arabs. It is not known how Gaza will be governed after the war given that Israel said it intends to wipe out Hamas.

Under PA law, every Palestinian terrorist who is killed attacking Israelis is classified as a "martyr” and the family is rewarded with a $1,511 grant and a monthly stipend of $353 for life, the Jewish News Syndicate reported. Following Hamas' terrorist attack Oct. 7 in southern Israel, the PA reportedly would be rewarding the families of slain terrorists who massacred more than 1,200 Israeli civilians about $2.8 million.

The martyr payments have long infuriated Israelis, who said it incentivizes terrorism, calling it "pay for slay." Many Palestinians said it provides crucial support for people standing up to an oppressive Israeli occupation. Drafts of the PA payments reform plan seen by U.S. officials show the PA will replace the scheme with a general welfare program, Politico reported, adding further specifics were not immediately available.

"There's been a great deal of work on this behind the scenes, and the progress is encouraging," a senior Biden administration official told Politico. Another administration official confirmed to Politico changes to the system were expected soon.

In an email to Newsmax, a State Department spokesperson said they didn't have anything to offer on the report, adding, "From the outset of the Biden administration, we have consistently made clear that we are strongly opposed to this practice."

Newsmax reached out to the White House for comment.

• Gazan Terrorist Confesses to Raping Israeli Girl on Oct. 7
• Hostage Talks Severed as Hamas Sticks to Maximalist Demands