The donation announced by U.S. Ambassador to Israel David Friedman follows years of aid cuts by President Donald Trump's administration to the Israeli-occupied West Bank and Gaza.
"I'm very pleased the USA is providing $5M for Palestinian hospitals and households to meet immediate, life-saving needs in combating COVID-19," Friedman wrote on Twitter.
"The USA, as the world's top humanitarian aid donor, is committed to assisting the Palestinian people," he added.
The $5 million will be international disaster assistance from the U.S. Agency for International Development, according to the State Department's website.
There was no immediate comment from the Palestinians.
The Trump administration since 2018 has cut hundreds of millions of dollars in aid to the Palestinians. The cuts have largely been seen as a bid to pressure them back to the negotiating table in peace talks with Israel.
The Palestinians have boycotted Trump's peace efforts since 2017, accusing him of pro-Israel bias after he declared Jerusalem Israel's capital and later moved the American embassy there from Tel Aviv.
Trump released his Middle East plan in January. Israel embraced it, while the Palestinians rejected it out of hand, in part because it endorsed Israel keeping its settlements in West Bank territory it captured a 1967 war.
(Reporting by Ali Sawafta in Ramallah and Rami Ayyub in Tel Aviv; Editing by Lisa Shumaker)

epa08332025 Palestinians manufacture protective coverall suits in a small sewing factory in Gaza City, 30 March 2020. Some of clothing factories in the Gaza Strip has changed its production lines to produce protective equipment, such as protective suits and medical face masks for Israel and West Bank markets amid concerns about the spread of the pandemic COVID-19 disease caused by the SARS-CoV-2 coronavirus. EPA-EFE/MOHAMMED SABER