The New Pro-Israel Law That Could Backfire on Israel

Efforts to amend a contentious anti-terrorism law that would cut all U.S. funding to the Palestinian Authority security forces and to a U.S. security mission in Jerusalem have run aground amid disputes between Capitol Hill and the Trump administration.

The Anti-Terrorism Clarification Act, signed by U.S. President Donald Trump last October and set to come into effect on Feb. 1, would force the Palestinians to forgo all American aid or else accept the jurisdiction of the U.S. court system in various terrorism-related civil suits brought against the Palestinian Authority and Palestine Liberation Organization—potentially opening them up to hundreds of millions of dollars in liabilities.

While the law was passed overwhelmingly with the support of Israel’s traditional allies in Congress, some in the Israeli government and the security establishment fear that the loss of such aid and the closing of the U.S. mission might undermine close Israeli-Palestinian security coordination and stability in the West Bank.

Republican Sen. Chuck Grassley, the bill’s primary sponsor, recently offered an amendment to soften the bill’s impact. But a congressional source familiar with the matter told Foreign Policy that the proposal was “dead” due to opposition from the State Department.

Grassley last week issued a stern letter to Trump and criticized the administration on Twitter for its lack of responsiveness. “I offered compromise to address State’s concerns AND give victims their day in court but State rejected offer We need an American desk at our own state dept!” the senator tweeted.

According to a source familiar with Grassley’s thinking who has worked on issues related to the new law, the amendment would have allowed funding to continue for the U.S. Security Coordinator mission in Jerusalem, led by a three-star American general. The mission has trained, equipped, and advised the Palestinian Authority security forces and coordinated between them and the Israeli military since 2005. “The compromise would have kept the security coordinator in place,” the source said. “You never know how the Palestinian Authority will respond, but I don’t know why the PA would have a valid reason to turn away the coordinator.”

The sole focus on the person of the coordinator, and not on overall U.S. security support to the PA, suggests that the Grassley proposal would apparently still have curtailed direct U.S. aid to the Palestinian Authority security forces, as mandated by the new law—in total $60 million a year. It’s unclear how effective the coordinator would be absent the funding to the Palestinian security forces.

The congressional source confirmed the overall thrust of the amendment, saying that it would have “allowed funding [to the U.S. Security Coordinator] through a different program.” Yet the source added that the State Department described the measure as bureaucratically “not workable” and said there was no way for the Palestinian Authority to continue accepting the U.S. funding even under the softened terms.

In response, a State Department official who refused to be named said: “We continue to work through the potential impact of the Anti-Terrorism Clarification Act (ATCA). In consultation with partners, we have taken steps to wind down certain projects and programs in the West Bank and Gaza.”

The Palestinian Authority, for its part, made clear last month that it would forgo all U.S. aid given the potential legal liabilities stemming from the Anti-Terrorism Clarification Act.

“We’re already not helping the victims [who sued the Palestinian Authority for terrorism damages],” the congressional source said. “Why would we now hurt ourselves and our national interest” by potentially creating a security crisis in Israel?

The Grassley camp is furious that the State Department isn’t engaging more fully to find a compromise that would fulfill the law’s stated objectives—finding redress for the families of American terrorism victims—while also assuaging the concerns of the Israeli government and Trump administration. “I checked the Constitution, and it turns out the State Department doesn’t get to vote in Congress,” said the source familiar with Grassley’s thinking.

The one thing both sides of the congressional debate seem to agree on is that the wholesale cuts in U.S. assistance to the Palestinians over the past year severely diluted any potential leverage the Anti-Terrorism Clarification Act may have had over the Palestinian Authority. The only remaining tranche of aid left was, in fact, for security—almost a consensus issue these days in Washington and Jerusalem. “Trump cutting all aid changed the facts on the ground,” one of the sources told FP. “Shedding all the money may have changed Palestinian thinking.”

It appears the State Department either missed the law when it was originally passed last year or was simply not consulted about its potential impact. The genesis of the law in the Grassley-led Judiciary Committee, a nontraditional route for foreign-policy legislation, may also have caused the initial oversight on the Hill, according to the congressional source. The government shutdown over the past month apparently made it harder for the two sides to work on a compromise.

Congress has four days left to agree on an amendment that would allow U.S. aid to continue flowing to the Palestinian Authority security forces and U.S. Security Coordinator—both arguably the most successful facets of the entire U.S.-led peace process over the past decade. “I’m very pessimistic it’ll happen,” the congressional source told FP.