(Adds comments from Rice)

By Sue Pleming

WASHINGTON, Feb 22 (Reuters) - The United States plans to announce tens of millions of dollars in new aid for the West Bank and Gaza next week to ease the humanitarian crisis in the Palestinian territories, U.S. officials said on Friday.

The funds will be channeled through the United Nations Relief and Works Agency for Palestinian refugees, which handles American and other aid for the Palestinians, said the U.S officials.

A large chunk of the funding will go to Gaza, where an economic blockade has led to a worsening humanitarian crisis, culminating in hundreds of thousands of people crossing into Egypt last month after the border was breached.

"The timing is right (for the new aid)," Samuel Witten, acting assistant secretary of state for the bureau of population, refugees and migration, told Reuters.

Witten declined to provide details of the amount the United States will announce next week, but he said the funds would be subject to strict oversight regarding aid to the Palestinians.

Secretary of State Condoleezza Rice said later the United States was very concerned about the humanitarian situation in Gaza and planned to step up its assistance.

"There are innocent Gazans that we don't want to suffer and we are going to do everything we can on the humanitarian side," Rice told a news conference to discuss a trip to Asia, which will include talks with Israel's Prime Minister Ehud Olmert when both of them are in Japan.

The Islamist group Hamas, which Washington brands a terrorist organization, is in charge of the Gaza Strip and controls are in place to ensure no U.S. funds are channeled directly to Hamas, he said.

In fiscal 2007, the Bush administration gave about $154 million to UNRWA to support Palestinian refugees in the West Bank, Gaza, Jordan, Syria and Lebanon.

Separately it has also put about $86 million over the last year into reforming security forces loyal to pro-Western President Mahmoud Abbas, whose Fatah movement dominates the West Bank.

BOOST TO ABBAS

One goal of the new U.S. aid is to boost Abbas' standing among Palestinians.

Abbas and his government have complained loudly in recent weeks that not enough is being done by the international community to improve the situation on the ground and Israel is not easing military checkpoints and other restrictions as promised in peace talks brokered by the United States.

"Unless there are improvements on the ground it is going to be very difficult for there to be the right atmosphere for the negotiations," said Rice, who plans to visit the region next month and will raise the issue with Olmert.

The United States hopes to get a peace treaty between Abbas and Olmert by the end of the Bush administration's term in January, 2009.

But talks have been moving slowly, with uncertainty over Gaza, security concerns and other thorny issues clouding the discussions that are ultimately aimed at creating a Palestinian state.

When Palestinian Prime Minister Salam Fayyad was in Washington last week he complained that Israel was not doing enough to improve the situation on the ground and that the pace of negotiations needed to quicken.

A senior U.S. official, who spoke on condition that he was not named, said the United States was acutely aware of rockets being fired constantly from Gaza into Israeli territory, but he urged the Israelis to "lighten up a little" and start easing some restrictions.

While he understood Israeli arguments over retaining checkpoints to prevent attacks on the Jewish state, he said Fayyad was suggesting "improving" their functioning rather than removing them entirely.

"They need to work out a balance here," added the official. (Editing by Chris Wilson)

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