Paying a financial incentive to the family of someone who committed terrorism is only a way to make sure that the terrorism continues. It's the equivalent of state-sponsored terrorism. The government should make sure that the payments stop because that's the only fair way to bring peace between the countries.
The Palestinian Authority shouldn't condone any allowance or payments to the widows of terrorists. If the PA wants to eradicate terrorism then they should comply with the U.S. and other nations to stop these so called "allowances" to ever take place again. Giving these allowances somehow encourage terrorism in a way.
The United States should demand that the Palestinian Authority stop making payments to the widows of terrorists. Furthermore, the United States should cut off funding to the Palestinian Authority if the organization is going to spend money by subsidizing these terrorists. American taxpayers should not be on the hook to support the families of terrorists.
It isn't the woman's fault that her husband was a terrorist. She may not have even known what he was planning. If other people are entitled to the same benefits after the death of a spouse, then she should be entitled as well. However, if it comes out that the woman had knowledge of or was complicit with her husband's plans, then I think she deserves to be punished.