WASHINGTON – A number of Palestinian and Israeli civil society groups that have received grants from the U.S. government to promote coexistence could lose millions of dollars as a result of the debate over the Anti-Terrorism Clarification Act.

The ATCA law, passed by Congress last year, has been making headlines in recents months due to concerns in both D.C. and Israel that it will lead to the end of U.S. security assistance to the Palestinian Authority, and harm Israeli and Palestinian security coordination.

The security assistance, however, is not the only element of U.S. assistance to the Palestinians that could fall victim to the legislation. Organizations that promote “people-to-people” interactions between Israelis and Palestinians, which have received grants from the U.S. government, are about to lose a significant amount of money for their operations.

The PA’s interpretation of ATCA led it to announce it would no longer accept any form of U.S. assistance in order to avoid multimillion dollar lawsuits. The PA is concerned about facing potentially significant financial damages, which would go well beyond the sums of money it receives annually from Washington.

While a lot of the focus has been on how the PA’s decision will influence security affairs, the PA’s step also amounts to asking the United States to quit supporting civil society groups through the U.S. Agency for International Development.

If the United States chooses to respect this request, 13 organizations that have received these grants will now have to do without that support.

Supporters of the legislation say this was not the intention of the law and that the PA is interpreting it in a wrong and exaggerated way. The law states that foreign entities that receive U.S. assistance could be sued in U.S. courts for past acts of terrorism. The civil society groups that will lose money have no ties of any kind to terrorism; rather, these are groups that work in Israel and the West Bank to promote peace, and do so according to Israeli law and with Israeli government authorization.

But the PA’s legal advisers are concerned that even assistance via USAID could potentially lead to crippling lawsuits against the PA under the mandate ATCA has created.

ATCA was promoted in Congress in response to rulings by U.S. courts that blocked multimillion dollar lawsuits against the PA filed by American citizens who were injured or lost loved ones in terror attacks committed by Palestinians. The U.S. Supreme Court affirmed a ruling by a lower court that the United States does not have the jurisdiction to deal with such lawsuits.

The Trump administration originally supported ATCA and the president signed it into law soon after it passed. Then, though, the administration became aware of the potential danger the legislation posed to U.S. support for Palestinian security forces.

Over the past two months, the administration has tried to convince Congress to “fix” the ATCA legislation in a way that would allow the United States to continue supporting the Palestinians in some form, especially in the security arena. That effort ran into difficulties as a result of the U.S. government shutdown this past month, as Haaretz reported earlier this month.

Now with the shutdown at least temporarily over, the administration is facing strong opposition to its proposed “fix” by Sen. Chuck Grassley (Republican of Iowa). Grassley raged on his Twitter account last week against the State Department’s suggested language, going so far as to say that “we need an American desk at our own State Dept!” – accusing department employees of not being loyal to the United States.

Israeli security officials have been concerned about the effects of ATCA ever since the law was passed. One high-ranking IDF officer told Haaretz it was frustrating how little debate was devoted to the legislation’s possible effects on the security situation on the ground in the West Bank.

Israel’s concerns became public last week when Israel’s Channel 13 News reported that the Israeli Embassy in Washington had reached out to the administration and to members of Congress, asking to find a way to continue U.S. support for PA security forces.

The administration has proposed funneling the money through the CIA. Even that, though, would require some level of compromise with Congress to avoid a situation in which the PA risks crippling lawsuits as a result of continuing its security coordination with Israel.

It should be noted that the lawsuit that inspired ATCA mostly deals with events from the second intifada. Back then, under Yasser Arafat’s leadership, the PA didn’t regularly work together with Israel to thwart terrorism. Rather, it encouraged and collaborated in the perpetration of many attacks.

The situation in the West Bank is different nowadays: Former IDF Chief of Staff Lt. Gen. Gadi Eisenkot told the Israeli government – in his last briefing before he stepped down from duty a few weeks ago – that security coordination with the PA saves the lives of Israeli and Palestinian citizens, and should continue despite political tensions.

The administration has tried to find a solution to the issue but is not pressing for an amendment to address the law’s potential impact on civil society groups. The PA also isn’t putting an emphasis on this issue, since these groups are nongovernmental and operate independently.

If Congress doesn’t amend the law by Thursday, the organizations will lose their funding. This will be a second blow sustained by some of these organizations in the past few months, after they lost significant funding last year when the Trump administration took away $10 million in support for people-to-people groups.

Joel Braunold, executive director of the Alliance for Middle East Peace – an umbrella organization supporting coexistence groups in Israel and the occupied territories – told Haaretz: “As ATCA comes into force on Thursday, one of the unintended consequences is the removal of $8 million in contractual obligations USAID had to people-to-people groups.

“In August, the administration took away the ability for the groups working in East Jerusalem and the West Bank to compete for grants. [Thursday], ATCA will cripple what remained. Contractual obligations should be sacrosanct and putting more stress with less resources on the backs of the very groups who are fighting for a peace we all want to see is utterly counterproductive.”