Progress towards "building a prosperous and stable future Palestinian state" will not happen unless there is a lasting ceasefire, a No 10 spokesperson said.
A group of MPs has called on the Prime Minister to do more to persuade Israel to lift restrictions on the movements of Palestinians and to improve the supply of water and electricity.
"We welcome the International Development Committee's strong support for our work on economic development in the Occupied Palestinian Territories and agree that sustainable development can only happen if economic restrictions are eased," a Government spokesman said.
"We will continue our work to help strengthen Palestinian institutions and build a prosperous and stable future Palestinian state. We are also committed to lasting change in Gaza, though we recognise that reconstruction and growth cannot happen until we have a durable ceasefire."