U.S. President Donald Trump signaled a willingness on Wednesday to settle for $500 million a legal fight with Harvard University over $2.5 billion in funding his administration canceled over accusations it allowed antisemitism and promoted diversity policies.

The issue of academic research on the Middle East has become a political flashpoint in the United States, where critics of Israel allege a "Palestine exception" exists when it comes to free speech rights.

The sum sought by the government is more than twice as much as the $200 million fine that Columbia University said it would pay when it settled its clash with the White House last week.