The first bolded part: I don't like that either, especially since it's largely a kickback scheme. Much of the money we give them has to be spent on US materiel which is conveniently made in... the districts of the people doing the approving. And if not that, their constiuents are uber-Israel supporters who want us to give $$$ to Israel. And, to be honest, I'm not sure how much they really need it. Israel's economy is chugging along pretty well (see Startup Nation). I think the only country in the region with higher GDP is Qatar or Bahrain or something. They'd probably be doing pretty well without billions from us every year.
Second bolded part: what leverage, exactly, are we getting for funding Fatah and Hamas? Hamas is at war with the same country that we're giving billions of dollars a year to, and have been for decades. They are existential, zero-sum enemies. Just this past year they carried out a 9/11 style attack against Israel, arguably our best ally in the region. Fatah is not as bad, but only because they're not as strong. They regularly pay terrorists and/or their families for terror attacks carried out against or in Israel, including against Americans (see the Taylor Force Act) .https://havokjournal.com/politics/international/three-reasons-palestinian-pay-slay-stay/
I'm all about paying people to support our interests, but when they're acting directly against those interests, we either need to do something immediate and meaningful about it, or cease our support.
If we really want meaningful peace between Israel and the Palestinians, the world needs to stop crying over a "ceasefire" and let the two groups sort our a permanent solution in which one side wins. Only then will there be peace.