Congress imposed the tight restrictions on aid to the Palestinians that President Bush had announced with fanfare in his State of the Union address, possibly dealing a blow to U.S. efforts to support new Palestinian President Mahmoud Abbas.

In the emergency spending bill that lawmakers completed late Tuesday, the White House had sought $200 million "to support Palestinian political, economic, and security reforms," as the president said in his February State of the Union address. But the fine print of the document gives $50 million of that money directly to Israel to build terminals for people and goods at checkpoints surrounding Palestinian areas. Another $2 million for Palestinian health care will be provided to Hadassah, the Women's Zionist Organization of America, while the allocation of the rest of the money is tightly prescribed.

The bill appears to make it difficult for the White House to give any of the aid directly to the Palestinian Authority, as Palestinians had hoped. Instead, the assistance must be funneled through nongovernmental organizations...

...Direct aid to the Palestinian Authority is symbolically important for Abbas, who is also known as Abu Mazen. Shortly after Palestinian leader Yasser Arafat died in November, Bush allowed $20 million to be delivered directly to the Palestinian Authority. Under an agreement with Congress, however, that money was immediately transferred to pay bills owed to Israel's electric company.

Edward G. Abington Jr., a consultant to the Palestinian Authority, said the congressional action is a "huge slap in the face to Abu Mazen," whose party faces a strong challenge in the upcoming municipal elections. He said it was a "pretty startling setback" for Abbas because Abington believes the aid restrictions are now more stringent than when Arafat was alive...