We present a new energy decomposition scheme, which decomposes interaction energies into electrostatic, polarization, and charge transfer contributions. The method is founded on the divide and conquer approach but is only prone to errors introduced by the basis set and the applied Hamiltonian. We illustrate the method by AM1/PM3 interaction energy decompositions on bimolecular systems and 64 water systems. Our decomposition scheme also allows for screening of charge transfer or charge transfer and polarization from intermolecular interactions. Screening of these interactions is illustrated by the charge analysis of a screened 64 water system. Our calculations indicate the importance of charge transfer, even for intermolecular separations 0.5-1.0 Angstrom from equilibrium.