The Obama administration is lobbying Congress to unblock $200 million in aid for the Palestinian Authority that was frozen because of its statehood bid in the United Nations, Reuters reported on Monday.

State Department spokeswoman Victoria Nuland was quoted as having said that the administration was in “intensive” discussions with key lawmakers who had put holds on the money.

“We still have some money in the pipeline but the concern is that if we don’t get this going with the Congress in short order there could be an effect on the ground,” Nuland told a news briefing.

She added, “There have been some concerns in some parts of Congress and we are trying to work through those.”

Over the weekend, the British Independent newspaper reported that officials in Washington have decided to hold up aid to the Palestinian Authority. A report on Army Radio on Sunday quoted Congressmen Gary Ackerman, a member of the House Foreign Relations Committee, as saying that “if the PA is willing to place its fate in the hands of the UN, perhaps they should also seek aid from the UN.”

The report remained unconfirmed until Monday, when U.S. Secretary of Defense Leon Panetta criticized the Congressional move during a Tel Aviv press conference with Israeli counterpart Ehud Barak.

"The administration opposes holding these funds from the Palestinians," Panetta said, insisting the funds have helped improve Israel's security.

"This is a critical time and it is not a time to withhold those funds," he said.

A few months ago, both the U.S. House of Representatives and the Senate passed resolutions backing the suspension of funds to the PA should it pursue its bid for a unilateral declaration of statehood.

Nuland said on Monday the Obama administration viewed U.S. aid as crucial to preparing the PA for its eventual role as the government of a Palestinian state.

“We think it is money that is not only in the interest of the Palestinians, it is in U.S. interest and it is also in Israeli interest and we would like to see it go forward,” she said.

Meanwhile, it was reported on Monday that European Union foreign policy chief Catherine Ashton has assured PA officials they were still on the EU dole.

According to a report in the Arabic-language Al-Quds newspaper, “Ashton informed Abbas that the EU projects to the PA and the Palestinians which are carried out in the Palestinian Territories, won’t be frozen due to the PA Leader move at the UN.”