The United States has restored funding to aid groups in the Gaza Strip, after the ruling Islamist group Hamas retracted its demand to scrutinize confidential documents about the groups' work.

Last week, USAID partner organizations stopped work after Hamas demanded to audit the books of international organizations. Compliance with that demand would have violated U.S. regulations banning contact with the militant group.

The U.S. has designated Hamas a terrorist organization.

U.S. officials on Sunday said funding was restored after Hamas backed away from its demand to examine the books.

Residents of Gaza receive nearly $100 million worth of aid from Washington through those international organizations.