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A demonstrator hurls back a tear gas towards the police during a protest against the $500 million U.S. infrastructure grant under the Millennium Challenge Corporation (MCC) near the parliament in Kathmandu, Nepal, on Feb. 24.NAVESH CHITRAKAR/Reuters

Nepal’s parliament on Thursday postponed debate on $500 million in U.S. aid that critics say undermines sovereignty as protesters opposed to the proposed funds clashed with police outside the assembly, officials and witnesses said.

The Millennium Challenge Corporation (MCC), a U.S. government aid agency, agreed in 2017 to provide the aid in a grant to fund an electricity transmission line and road improvement project.

The aid does not need to be repaid and Washington says it comes without conditions.

But opponents, many wary of U.S. influence in the region, say the aid would undermine Nepal’s laws and sovereignty, as it would not have sufficient oversight over the projects.

Major political parties, including those in the ruling coalition, are divided over whether to accept the U.S. grant, which has yet to be ratified by parliament.

“Thursday’s session of parliament has been postponed for Friday afternoon at the government’s request,” parliament official Rojnath Pandey told Reuters.

The postponement came as hundreds of protesters broke through barricades and clashed with police as they tried to march on parliament, witnesses said.

“Police have used teargas, water cannon and batons to stop the protesters,” Kathmandu district official Deepak Paudel said.

Thirteen protesters were detained for trying to demonstrate in a banned area and four people were injured, he added.

The U.S. Embassy in Nepal says the grant would be “a gift from the American people and a partnership between our nations” that would bring jobs and infrastructure and improve the lives of some of the world’s poorest people.

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