Macklemore has said he will donate his $1m (£750,000) net earnings from Ed Sheeran's upcoming tour to organisations supporting Palestinian people.
The US rapper challenged Robert Kraft, who did not allow him to perform at his Gillette Stadium in Massachusetts as part of The Loop tour, to match his donation.
He has now responded by saying that he and Sheeran have pledged $2m (£1.5m) each "to aid in the region".
It comes after Macklemore said he had been removed as Sheeran's opening act over pro-Palestine comments he made during a show in New Jersey.
All the other artists scheduled to perform as part of the tour - including Danish band Lukas Graham and Billie Eilish's brother and musical collaborator, Finneas - subsequently pulled out in protest.
In a statement posted on social media, Macklemore wrote: "With everything that has happened over the last 48 hours, I want to bring the conversation back to where it belongs: to the Palestinian people who are still being killed, still living under military occupation, and still fighting for their freedom.
"I will be donating the entire $1 million of my net earnings from Ed Sheeran's Loop Tour to six organizations working directly to support the Palestinian people. And I invite Robert Kraft to match my donation. Whatever we disagree about, perhaps we can agree on this: Palestinian lives are worth protecting. A Palestinian life is no less valuable than any other life on this earth."
Mr Kraft, the owner of the New England Patriots, said in an Instagram post shortly after Macklemore's statement that he and Sheeran would pledge the money "to aid in the region to fight this humanitarian crisis", although he did not specify which organisations or charities would receive the money.
"I have dedicated much of my life to building bridges between all people. I believe deeply that all lives are worth protecting," Mr Kraft said.
"Ed now plans to reach out to other venue owners and our goal is to continue to work together to build bridges," he added.
Earlier this week, Sheeran said he was "appalled by the conflict between Israel and Palestine", and described the "suffering and pain caused on both sides" as a human tragedy in a lengthy Instagram statement.
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"I am not complicit," he said. "I have my personal views on this devastating conflict. Just because I choose not to speak publicly, it doesn't mean I don't have them, and it doesn't mean I don't care."
Sheeran also said that "Macklemore coming off tour was the promoter's decision, it was not mine", adding that the rapper's contract for the tour "was with the promoter, not me".
In a statement provided to Sky News' US partner network NBC News, Mr Kraft had said the decision on his venues was reached following Macklemore's comments and "a broader history of antisemitic rhetoric and imagery that we believe has been deeply offensive and hurtful to the Jewish community".
He said: "This decision is not about diminishing the suffering of innocent Palestinians or denying anyone the right to advocate on their behalf. Their pain and loss are real."
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