"The issue was that they could not get visas, so the decision was made to transfer the Fulbrights to the West Bank rather than lose them for this year," Casey told Associated Press.
Since the Islamist movement Hamas won parliamentary elections more than two years ago, Israel has put Gaza under a tightening blockade.
It has severely restricted the number of Gazans it allows into Israel as part of a broad closure policy which, it says, is designed to halt the regular firing of rockets and mortars by militants from Gaza into southern Israel.
Hadeel Abukwaik, 23, won a Fulbright to study for a masters degree in software engineering after graduating last summer from al-Azhar University in Gaza City. "I am asking myself, what did I do wrong? Is it my fault to be here in Gaza?" she said. "I am wondering, is it better for our neighbours, and for our neighbour Israel, to have an educated neighbour or to have an angry neighbour?"
Abdulrahman Abdullah, 29, won a Fulbright to study for an MBA in one of four American universities. He said he had spent several years preparing for the scholarship since graduating in finance and accounting from Bir Zeit University in Ramallah in the West Bank.
"If we are going to have a Palestinian state, then who is going to build this state and help in the development of the Palestinian community?" he said.
"Education is a humanitarian issue and has nothing to do with Hamas or any other party."
Former Fulbright scholar Sari Bashi, the head of the Israeli human rights group Gisha, which has brought court petitions on this issue, said: "The fact that the US government cannot even get its Fulbright students out of Gaza demonstrates the arbitrariness and short-sightedness of the closure policy - led by Israel but supported by the US and Western allies - that has trapped 1.5million people, including hundreds of Palestinian students seeking to study abroad."
The education committee at the Israeli parliament held hearings this week into the issue of the several hundred Gazan students who were unable to travel abroad to study.
Military officials said permission was given for Palestinians to leave Gaza "for exceptional humanitarian and urgent medical cases only."