The action in the U.S. was taken by the Treasury Department's Office of Foreign Assets Control. The British order targeting the foundation was taken "following intelligence reports linking the organization with terrorist activity," a statement from the Treasury said.
The foundation is suspected of funneling money to Hamas, the Islamic militant group, a U.S. government official said, speaking on condition of anonymity.
The U.S. blocking order posted on OFAC's web site said the foundation has offices in countries including Germany, Belgium, Sweden and Pakistan. The foundation's office in Aachen, Germany, is believed to be the foundation's main location, the U.S. official said.
The blocking orders marks the latest move by the Bush administration to financially paralyze terrorist financiers, a key component of President Bush's war on terror.
It was not immediately known whether the foundation has any assets in the United States. The process of checking bank accounts usually takes around a week.
The U.S. had few details on the foundation.
However, Paul Wilkinson, chairman of the Center for the Study of Terrorism and Political Violence at St. Andrews University in Scotland, said the group is a Palestinian support organization that helps fund suicide bombings and other attacks in Israel, the West Bank and Gaza strip.
"Recent terrorist atrocities in Saudi Arabia and Morocco show that we must remain constantly vigilant and bear down on terrorism and the people who fund it," Britain's Treasury chief Gordon Brown said in a statement Thursday.
Wilkinson said Danish authorities had linked the group to the militant Palestinian movement Hamas. He told The Associated Press that he didn't believe there was a formal connection between the foundation and the Al-Aqsa Martyr's Brigade, a militia connected to Yasser Arafat's Fatah movement.
He added that the Netherlands, Germany and Denmark had listed the group as an organization suspected of supporting terrorism.
Wilkinson said he was not aware of any links between the Al-Aqsa Foundation and international terrorist groups such as al Qaeda, which U.S. officials suspect of involvement in the recent attacks in Morocco and Saudi Arabia.
He said Palestinian militant movements are generally keen to distance themselves from al Qaeda, which they see as trying to harness sympathy for the Palestinian cause for its own benefit.
A Treasury spokesman said he couldn't comment on the nature of the security service intelligence that prompted Brown's order to freeze Al-Aqsa Foundation assets. He said Brown's statement did not link the group to the attacks in Riyadh and Casablanca.
The Treasury statement said that "strong evidence from international law enforcement agencies links Al-Aqsa Foundation with terrorist activity. A request has been made to all G20 countries to freeze the assets of Al-Aqsa."