SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Israeli-Palestinian Peace 
Enhancement Act of 2003''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The security of the State of Israel is a major and 
        enduring national security interest of the United States.
            (2) A lasting peace in the Middle East region, which Israel 
        desperately seeks, can only take root in an atmosphere free of 
        violence and terrorism.
            (3) The Palestinian people have been ill-served by leaders 
        who, by resorting to violence and terrorism to pursue their 
        political objectives, have brought economic and personal 
        hardship to their people and brought a halt to efforts seeking 
        a negotiated settlement of the conflict.
            (4) The United States has an interest in a Middle East in 
        which two states, Israel and Palestine, will live side by side 
        in peace and security.
            (5) In his speech of June 24, 2002, and in other 
        statements, President George W. Bush outlined a comprehensive 
        vision of the possibilities of peace in the Middle East region 
        following a change in Palestinian leadership.
            (6) President Bush stated in his June 24, 2002, speech that 
        ``a stable and peaceful Palestinian state is necessary to 
        achieve the security that Israel longs for,'' and Israel has 
        committed itself to concrete steps to achieve that end.
            (7) The Palestinian state must be a reformed, peaceful, and 
        democratic state that abandons forever the use of terror.
            (8) Israel has repeatedly indicated its willingness to make 
        painful concessions to achieve peace once there is a partner 
        for peace on the Palestinian side.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to express the sense of Congress with respect to United 
        States recognition of a Palestinian state;
            (2) to encourage the emergence of a Palestinian leadership 
        that is capable of achieving the reforms outlined by President 
        Bush, including making peace with Israel, combating all forms 
        of terrorism, and developing a peaceful, democratic Palestinian 
        state; and
            (3) to demonstrate United States willingness to provide 
        substantial economic and humanitarian assistance, and to 
        support large-scale multilateral assistance, to a peaceful, 
        democratic Palestinian state, after the Palestinians have 
        achieved the reforms outlined by President Bush and have 
        achieved peace with Israel.

SEC. 4. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) peace between Israel and the Palestinians cannot be 
        achieved until the Palestinian system of government has been 
        transformed along the lines outlined in President Bush's June 
        24, 2002, speech;
            (2) substantial United States and international economic 
        assistance will be needed after the Palestinians have achieved 
        the reforms described in section 620K(c)(2) of the Foreign 
        Assistance Act of 1961 (as added by section 6 of this Act) and 
        have made a lasting and secure peace with Israel;
            (3) any new Palestinian administration urgently should take 
        the necessary security-related steps to allow for 
        implementation of a performance-based road map to resolve the 
        Israeli-Palestinian conflict;
            (4) the United States Administration should work vigorously 
        toward the goal of two states living side-by-side in peace 
        within secure and internationally-recognized boundaries free 
        from threats or acts of force; and
            (5) the United States has a vital national security 
        interest in a permanent, comprehensive, and just resolution of 
        the Arab-Israeli conflict, and particularly the Palestinian-
        Israeli conflict, based on the terms of United Nations Security 
Council Resolutions 242 and 338.

SEC. 5. RECOGNITION OF A PALESTINIAN STATE.

     It is the sense of Congress that a Palestinian state should not be 
recognized by the United States until the President determines that--
            (1) a new leadership of a Palestinian governing entity, not 
        compromised by terrorism, has been elected and taken office; 
        and
            (2) the newly-elected Palestinian governing entity--
                    (A) has demonstrated a firm and tangible commitment 
                to peaceful coexistence with the State of Israel and to 
                ending anti-Israel incitement, including the cessation 
                of all officially sanctioned or funded anti-Israel 
                incitement;
                    (B) has taken sustained and effective measures to 
                counter terrorism and terrorist financing in the West 
                Bank and Gaza, including the dismantling of the 
terrorist infrastructure and the confiscation of unlawful weaponry;
                    (C) has established one unified Palestinian 
                security entity that is fully cooperating with the 
                appropriate Israeli security organizations;
                    (D) has achieved exclusive authority and 
                responsibility for governing the national affairs of a 
                Palestinian state, has taken effective steps to ensure 
                democracy, the rule of law, and an independent 
                judiciary, and has adopted other reforms ensuring 
                transparent and accountable governance; and
                    (E) has taken effective steps to ensure that its 
                education and communications systems promote the 
                acceptance of Israel's existence and of peace with 
                Israel and actively discourage anti-Israel incitement.

SEC. 6. LIMITATION ON ASSISTANCE TO A PALESTINIAN STATE.

    Chapter 1 of part III of the Foreign Assistance Act of 1961 (22 
U.S.C. 2351 et seq.) is amended--
            (1) by redesignating the second section 620G (as added by 
        section 149 of Public Law 104-164 (110 Stat. 1436)) as section 
        620J; and
            (2) by adding at the end the following new section:

``SEC. 620K. LIMITATION ON ASSISTANCE TO A PALESTINIAN STATE.

    ``(a) Limitation.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, direct assistance may be provided under this Act or any 
        other provision of law to the government of a Palestinian state 
        only during a period for which a certification described in 
        subsection (c) is in effect. The limitation contained in the 
        preceding sentence shall not apply (A) to humanitarian or 
        development assistance that is provided through nongovernmental 
        organizations for the benefit of the Palestinian people in the 
        West Bank and Gaza, or (B) to assistance that is intended to 
        reform the Palestinian Authority and affiliated institutions, 
        or a newly elected Palestinian governing entity, in order to 
        help meet the requirements contained in subparagraphs (A) 
        through (H) of subsection (c)(2) or to address the matters 
        described in subparagraphs (A) through (E) of section 5(2) of 
        the Israeli-Palestinian Peace Enhancement Act of 2003.
            ``(2) Waiver.--The President may waive the limitation of 
        the first sentence of paragraph (1) if the President determines 
        and certifies to the Committee on International Relations and 
        the Committee on Appropriations of the House of Representatives 
        and the Committee on Foreign Relations and the Committee on 
        Appropriations of the Senate that it is vital to the national 
        security interest of the United States to do so.
    ``(b) Congressional Notification.--
            ``(1) In general.--Assistance made available under this Act 
        or any other provision of law to a Palestinian state may not be 
        provided until 15 days after the date on which the President 
        has provided notice thereof to the Committee on International 
        Relations and the Committee on Appropriations of the House of 
        Representatives and to the Committee on Foreign Relations and 
        the Committee on Appropriations of the Senate in accordance 
        with the procedures applicable to reprogramming notifications 
        under section 634A(a) of this Act.
            ``(2) Sunset.--Paragraph (1) shall cease to be effective 
        beginning ten years after the date on which notice is first 
        provided under such paragraph.
    ``(c) Certification.--A certification described in this subsection 
is a certification transmitted by the President to Congress that--
            ``(1) a Palestinian state exists and has been recognized by 
        the United States and Israel and admitted to the United 
        Nations;
            ``(2) a binding international peace agreement exists 
        between Israel and the Palestinian state that--
                    ``(A) was freely signed by both parties;
                    ``(B) guarantees both parties' commitment to a 
                mutually agreed border between two states that 
                constitutes a secure and internationally recognized 
                boundary for both states, with no remaining territorial 
                claims;
                    ``(C) provides a permanent resolution for both 
                Palestinian refugees and Jewish refugees from Arab 
                countries;
                    ``(D) provides for mutually agreeable arrangements 
                on all remaining permanent status issues, including 
                borders, settlements, water resources, and Jerusalem; 
                and
                    ``(E) includes a renunciation of all remaining 
                claims through provisions that commit both sides to the 
                end of the conflict; and
            ``(3) the new Palestinian government--
                    ``(A) has been democratically elected through free 
                and fair elections, has exclusive authority and 
                responsibility for governing the national affairs of 
                the Palestinian state, and has achieved the reforms 
outlined by President Bush in his June 24, 2002, speech;
                    ``(B) has completely renounced the use of violence 
                against the State of Israel and its citizens, is 
                vigorously attempting to prevent any acts of terrorism 
                against Israel and its citizens, and punishes the 
                perpetrators of such acts in a manner commensurate with 
                their actions;
                    ``(C) has dismantled, and terminated the funding 
                of, any group within its territory that conducts 
                terrorism against Israel;
                    ``(D) is engaging in ongoing and extensive security 
                cooperation with the State of Israel;
                    ``(E) refrains from any officially sanctioned or 
                funded statement or act designed to incite Palestinians 
                or others against the State of Israel and its citizens;
                    ``(F) has an elected leadership not compromised by 
                terror;
                    ``(G) has instituted clearly defined and agreed 
                upon limits on its military; and
                    ``(H) has no alliances or agreements that pose a 
                threat to the security of the State of Israel.
    ``(d) Recertifications.--Not later than 90 days after the date on 
which the President transmits to Congress an initial certification 
under subsection (c), and every 6 months thereafter for the 10-year 
period beginning on the date of transmittal of such certification--
            ``(1) the President shall transmit to Congress a 
        recertification that the requirements contained in subsection 
        (c) are continuing to be met; or
            ``(2) if the President is unable to make such a 
        recertification, the President shall transmit to Congress a 
        report that contains the reasons therefor.
    ``(e) Rule of Construction.--A certification under subsection (c) 
shall be deemed to be in effect beginning on the day after the last day 
of the 10-year period described in subsection (d) unless the President 
subsequently determines that the requirements contained in subsection 
(c) are no longer being met and the President transmits to Congress a 
report that contains the reasons therefor.''.

SEC. 7. AUTHORIZATION OF ASSISTANCE TO A PALESTINIAN STATE.

    Chapter 1 of part III of the Foreign Assistance Act of 1961 (22 
U.S.C. 2351 et seq.), as amended by section 1506, is further amended by 
adding at the end the following new section:

``SEC. 620L. AUTHORIZATION OF ASSISTANCE TO A PALESTINIAN STATE.

    ``(a) Assistance.--The President is authorized to provide 
assistance to a Palestinian state in accordance with the requirements 
of this section.
    ``(b) Activities To Be Supported.--Assistance provided under 
subsection (a) shall be used to support activities within a Palestinian 
state to substantially improve the economy and living conditions of the 
Palestinians by, among other things, providing for economic development 
in the West Bank and Gaza, continuing to promote democracy and the rule 
of law, developing water resources, assisting in security cooperation 
between Israelis and Palestinians, and helping with the compensation 
and rehabilitation of Palestinian refugees.
    ``(c) Authorization of Appropriations.--Of the amounts made 
available to carry out chapter 4 of part II of this Act for a fiscal 
year, there are authorized to be appropriated to the President to carry 
out subsections (a) and (b) such sums as may be necessary for each such 
fiscal year.
    ``(d) Coordination of International Assistance.--
            ``(1)  In general.--Beginning on the date on which the 
        President transmits to Congress an initial certification under 
        section 620K(c), the Secretary of State shall--
                    ``(A) seek to convene one or more donors 
                conferences to gain commitments from other countries, 
                multilateral institutions, and nongovernmental 
                organizations to provide economic assistance to 
                Palestinians;
                    ``(B) seek to ensure that such commitments to 
                provide assistance are honored in a timely manner;
                    ``(C) promote coordination of assistance among the 
                United States and such other countries, multilateral 
                institutions, and nongovernmental organizations;
                    ``(D) monitor the assistance to ensure that the 
                assistance provided to Palestinians is used for the 
                purposes for which it was provided; and
                    ``(E) seek to ensure that other countries, 
                multilateral institutions, and nongovernmental 
                organizations do not provide assistance to Palestinians 
                through entities that are designated as terrorist 
                organizations under United States law.
            ``(2) Annual reports.--Not later than 180 days after the 
        date of the enactment of this section, and on an annual basis 
        thereafter, the Secretary of State shall prepare and submit to 
        the Committee on International Relations and the Committee on 
        Appropriations of the House of Representatives and the 
        Committee on Foreign Relations and the Committee on 
        Appropriations of the Senate a report that describes the 
        activities undertaken to meet the requirements of paragraph 
        (1).
            ``(3) Burdensharing.--Each report under paragraph (2) shall 
        include a description of the amounts committed, and the amounts 
        provided, to a Palestinian state or Palestinians during the 
        reporting period by each country and organization.''.
Israeli-Palestinian Peace Enhancement Act of 2003 - Calls for: (1) any new Palestinian authority to take security-related steps to implement a road map to resolve the Israeli-Palestinian conflict; and (2) the U.S. Administration to work toward the two states living in peace within secure and internationally recognized boundaries.

Expresses the sense of Congress that a Palestinian State should not be recognized until the President makes specified determinations, including that new leadership of a Palestinian governing entity, not compromised by terrorism, has been elected and has taken measures to counter terrorism and terrorist financing in the West Bank and Gaza.

Amends the Foreign Assistance Act of 1961 to allow U.S. assistance to be provided to a Palestinian state only: (1) during the effective period of a presidential certification that a Palestinian state exists that has been recognized by the United States and Israel and admitted to the United Nations, that a binding international peace agreement exists between Israel and the Palestinian state, and that the new Palestinian Government has been democratically elected, has renounced violence against Israel, has dismantled any group that conducts terrorism against Israel, has instituted clearly agreed upon limits on its military, and has no agreements that threaten Israel's security; and (2) if the President has provided advance notice to Congress.

Authorizes the President to provide assistance to a Palestinian State to improve the economy and living conditions of the Palestinians.

Directs the Secretary of State to coordinate a program of international economic assistance to the Palestinians.
A bill to enhance peace between the Israelis and Palestinians.