Brian Nelson, the department’s under-secretary for terrorism and financial intelligence, said this will ensure that funds are not diverted to Hamas, which Washington has categorised as a terrorist organisation.

He said Hamas does not overtly raise funds. Instead, it employs “money laundering typologies” to do so.

Nelson also said the group had in the past “abused” the non-profit sector to create a false impression that funds were going directly to the Palestinians or utilised for charitable means, adding it was an area of concern.

He said the US was of the view that funding Hamas would prolong the conflict.

“We think it is key to ending this conflict, but the more fundamental reason is to make sure that those resources are actually making it to the Palestinian people and not in service of this conflict,” he said in an interview with several media outlets here today.

Nelson said the US does dintinguish between Hamas and the Palestinian people, and that his government is “doing everything we can to support humanitarian assistance going to the Palestinian people”.

Asked about Putrajaya’s stance on Hamas, he said Washington recognises that the Malaysian government feels differently about Hamas.

Two days ago, Nelson said the US was looking to prevent Malaysia from becoming a jurisdiction where Hamas could raise funds and move money.

In November, Prime Minister Anwar Ibrahim was reported to have said that Malaysia would maintain ties with Hamas and not punish the group.

However, Nelson felt that there were opportunities in the shared interest he had heard in every place he has visited.

“No one wants their financial systems abused by any actor. It doesn’t matter who they are or why they are engaged in that illicit activity,” he said.

Nelson is in Malaysia to advance the Treasury’s work in countering terrorist financing and revenue generation for Iran and its proxies, which included Hamas.

Reuters previously reported that there had been an uptick in money moving to Iran and its proxies, including Hamas, through the Malaysian financial system.